Cardinal Health 1st-Quarter Profit Up 25%
Cardinal Health Inc.'s (CAH) fiscal first-quarter earnings rose 25% as stronger margins and a tax benefit helped offset the impacts of weaker revenue.
The the drug wholesaler's board also authorized an additional $1 billion in stock repurchases. Chairman and Chief Executive George Barrett said the three-year buyback program reflected the company's strong operating cash flow and the strength of our balance sheet. The new authorization is in addition to the company's existing stock repurchase plan, which has $350 million remaining.
Cardinal lost its contract with pharmacy-benefits manager Express Scripts Holding Co. (ESRX) last year to rival AmerisourceBergen Corp. (ABC). Cardinal was dealt another blow in March when Walgreen Co. (WAG) and European drug giant Alliance Boots GmbH agreed to get their branded and generic pharmaceutical products from AmerisourceBergen.
In the latest quarter, Cardinal's pharmaceutical segment sales declined 7.2% to $21.8 billion driven by expiration of the Express Scripts and Walgreen contracts.
Medical segment revenue was up 13% driven by the early 2013 acquisition of medical-supplies provider AssuraMed.
Cardinal Health reported a profit of $339 million, or 99 cents a share, up from $271 million, or 79 cents a share, a year earlier. The latest period included a tax benefit of 18 cents. Excluding tax benefits, acquisition-related charges and other items, adjusted earnings from continuing operations were up at $1.10 from 81 cents. Revenue decreased 5.3% to $24.5 billion.
Analysts polled by Thomson Reuters recently expected per-share earnings of 86 cents and revenue of $22.76 billion.
Gross margin rose to 5.2% from 4.5%.
For the recently started fiscal year, the company raised its per-share earnings estimate to $3.62 to $3.72, from its previous estimate for per-share profit of $3.45 to $3.60.
Shares closed Wednesday at $55.68 and were inactive in recent premarket trading.
Write to Tess Stynes at firstname.lastname@example.org
(CORRECTION: This item was corrected because the original incorrectly said the company had narrowed its fiscal-year profit guidance. Cardinal raised its per-share earnings estimate.)
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