Summary
Cardinal Health Inc. reported its second-quarter fiscal year 2019 results, demonstrating revenue growth driven by its pharmaceutical distribution and specialty pharmaceutical businesses. While overall revenue saw a positive uptick of 7% year-over-year, the company's profitability faced headwinds, particularly a decline in non-GAAP operating earnings and diluted EPS. This was attributed to challenges in the pharmaceutical segment's generics program, increased costs for Cardinal Health Brand products, and adverse pharmaceutical customer contract renewals. The company also recognized a significant gain from the divestiture of its naviHealth business, which bolstered GAAP earnings. Despite these profitability pressures, Cardinal Health maintained a strong liquidity position, with an increase in cash and equivalents and ample credit facilities, alongside continued capital deployment through dividends and share repurchases.
Financial Highlights
45 data points| Revenue | $37.74B |
| Cost of Revenue | $36.01B |
| Gross Profit | $1.73B |
| SG&A Expenses | $1.06B |
| Operating Income | $504.00M |
| Interest Expense | $76.00M |
| Net Income | $280.00M |
| Shares Outstanding (Basic) | 299.00M |
| Shares Outstanding (Diluted) | 300.00M |
Key Highlights
- 1Total revenue increased by 7% to $37.7 billion for the three months ended December 31, 2018, and by 8% to $73.0 billion for the six months ended December 31, 2018, primarily driven by pharmaceutical distribution and specialty pharmaceutical customers.
- 2GAAP operating earnings saw a significant increase of 26% for the quarter and 100% for the six months, largely due to a $508 million gain from the divestiture of the naviHealth business and favorable litigation adjustments.
- 3Non-GAAP operating earnings decreased by 13% for the quarter and 12% for the six months, impacted by the pharmaceutical segment's generics program performance, increased costs for branded products, and adverse customer contract renewals.
- 4GAAP diluted EPS declined significantly by 72% for the quarter and 22% for the six months, primarily due to the prior year's transitional tax benefits from the Tax Cuts and Jobs Act.
- 5Non-GAAP diluted EPS decreased by 15% for the quarter and 1% for the six months, reflecting the challenges in operating earnings.
- 6The company divested its naviHealth business, realizing a pre-tax gain of $508 million and retaining a 44% equity interest.
- 7Cash and equivalents increased to $2.2 billion at December 31, 2018, from $1.8 billion at June 30, 2018, supported by operating activities and the naviHealth divestiture proceeds.