Summary
Cardinal Health Inc. reported solid revenue growth in the third quarter of fiscal year 2023, with a 13% increase year-over-year, driven primarily by strong performance in its Pharmaceutical segment, particularly from branded and specialty pharmaceutical sales. The company also saw a significant improvement in GAAP operating earnings, shifting from a loss in the prior year to a gain, largely due to favorable litigation recoveries and the absence of prior-year goodwill impairment charges in the Medical segment. Non-GAAP operating earnings saw an 11% increase for the quarter, also bolstered by the Pharmaceutical segment. Despite the top-line growth and improved operating earnings, the Medical segment experienced a revenue decline due to lower volumes and pricing in personal protective equipment (PPE), though segment profit was positively impacted by lower PPE costs. The company continues to navigate inflationary pressures, which had a mixed impact across segments. Cardinal Health also actively managed its capital, repurchasing $1.5 billion in shares and paying $399 million in dividends during the nine-month period. The company maintains adequate liquidity and is managing its significant opioid litigation settlement obligations, with a substantial portion of the payments scheduled over the next 17 years.
Financial Highlights
49 data points| Revenue | $50.50B |
| Cost of Revenue | $48.69B |
| Gross Profit | $1.81B |
| SG&A Expenses | $1.17B |
| Operating Income | $604.00M |
| Interest Expense | $26.00M |
| Net Income | $365.00M |
| EPS (Basic) | $1.43 |
| EPS (Diluted) | $1.41 |
| Shares Outstanding (Basic) | 256.00M |
| Shares Outstanding (Diluted) | 258.00M |
Key Highlights
- 1Total revenue increased by 13% to $50.5 billion for the three months ended March 31, 2023, driven by the Pharmaceutical segment.
- 2GAAP operating earnings improved significantly, turning from a loss of $97 million in Q3 FY2022 to earnings of $572 million in Q3 FY2023, aided by litigation recoveries and reduced impairment charges.
- 3Non-GAAP operating earnings increased by 11% to $606 million for the quarter, primarily due to strong performance in the Pharmaceutical segment's generics program and specialty products.
- 4The Medical segment experienced a 5% decrease in revenue, primarily due to lower volumes and pricing in personal protective equipment (PPE), although Medical segment profit saw a favorable impact from lower PPE costs.
- 5The company repurchased $1.5 billion of its common shares during the nine months ended March 31, 2023, demonstrating capital return to shareholders.
- 6Cash and equivalents stood at $4.0 billion at the end of the quarter, with $2.0 billion in net cash provided by operating activities for the nine-month period.
- 7Goodwill impairment charges of $863 million were recognized in the Medical segment for the nine months ended March 31, 2023, though no impairment was found at March 31, 2023.