CARDINAL HEALTH INC Quarterly Report for Q1 Ended Sep 30, 2024

Summary

Cardinal Health Inc. (CAH) reported its first quarter fiscal year 2025 results, demonstrating resilience and strategic execution despite the significant impact of the OptumRx contract expiration. While consolidated revenue saw a 4% decrease to $52.3 billion, primarily due to the OptumRx contract loss, the company achieved a 12% increase in non-GAAP operating earnings to $625 million, driven by strong performance in branded and specialty pharmaceuticals, including the favorable impact of early COVID-19 vaccine distribution. Operationally, the company navigated the loss of OptumRx revenue by focusing on growth from existing customers and cost-saving measures. The acquisition of Integrated Oncology Network (ION) for $1.1 billion was announced, signaling a strategic move to expand its oncology services. Despite a net cash used in operating activities of $1.6 billion, largely due to working capital unwinding from OptumRx and opioid settlement payments, Cardinal Health maintained a solid liquidity position and continued its capital deployment strategy through share repurchases and dividend payments.

Key Highlights

• 1Consolidated revenue decreased 4% to $52.3 billion, primarily impacted by the expiration of OptumRx contracts.
• 2Non-GAAP operating earnings increased 12% to $625 million, driven by growth in branded and specialty pharmaceuticals and COVID-19 vaccine distribution.
• 3Non-GAAP diluted EPS rose 9% to $1.88.
• 4The company announced a $1.1 billion acquisition of Integrated Oncology Network (ION) to expand its oncology offerings.
• 5Net cash used in operating activities was $1.6 billion, impacted by OptumRx contract unwinding and opioid settlement payments.
• 6The company has $3.2 billion remaining under its share repurchase authorization, and repurchased $375 million in the quarter.
• 7The company reported compliance with its net leverage ratio covenant of no more than 3.75-to-1.

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