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What's in Store for Cardinal Health (CAH) in Q1 Earnings?
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Cardinal Health, Inc. (CAH - Free Report) is scheduled to report first-quarter fiscal 2024 results on Nov 3, before the opening bell.
In the last reported quarter, the company delivered an earnings surprise of 4.73%. CAH’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 16.03%.
Q1 Estimates
For the fiscal first quarter, the consensus mark for earnings is pegged at $1.40 per share, indicating an improvement of 16.7% from the prior-year quarter’s reported figure. The same for revenues is pinned at $54.53 billion, implying growth of 9.9% year over year.
Factors to Note
Cardinal Health's Pharmaceutical segment is one of the largest pharmaceutical distributors in the United States. In the fourth quarter of fiscal 2023, revenues from this segment amounted to approximately $49.7 billion, up 15% on a year-over-year basis. The performance reflects branded pharmaceutical sales growth in the Pharmaceutical Distribution and Specialty Solutions segment, whose profit was also up 12%. This momentum is likely to have continued in the fiscal first quarter as well.
The company’s generics program sales were also strong during the last reported quarter and its upcoming results are expected to gain from this trend.
In April, Cardinal Health opened two new distribution centers in Central Ohio to support U.S. Medical Products and Distribution, and at-Home Solutions businesses. Last year, the company opened a new distribution center in the Columbus, OH area, lending support to its at-Home Solutions business.
CAH is also focused on improving patient engagement and clinical pharmacy solutions. In June, it signed an agreement to contribute its Outcomes business to BlackRock’s Transaction Data Systems for integrated offering of pharmacy workflow software using patient engagement and clinical solutions. The idea was to create additional opportunities for pharmacists and enable better access for payers.
In May, the company launched modern payment solutions to increase the operational efficiency of independent pharmacies.
These developments are likely to have favored CAH’s fiscal first-quarter performance. Moreover, new distribution centers might have helped alleviate supply-chain challenges.
For the Medical segment, a decrease in product and distribution volumes as well as pricing led to lower revenues in the previously reported quarter. Earnings were also hurt by net inflationary impacts. However, the fiscal first-quarter results are likely to reflect a recovery in the Medical segment. Revenues are expected to have grown nearly 3%. The profit is estimated to be almost $400 million in fiscal 2024, which is likely to be reflected in the soon-to-be-reported quarter.
However, demand for CAH’s at-Home Solutions remained strong during the past couple of quarters. The company launched a supply-chain network and last-mile fulfillment solution — Velocare — for providing critical products and services for hospital-level care at home. This strong performance is likely to have continued in the fiscal first quarter.
Our proven model does not conclusively predict an earnings beat for Cardinal Health this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here, as you will see below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($1.38 per share) and the Zacks Consensus Estimate, is -1.13% for Cardinal Health.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: Cardinal Health currently carries a Zacks Rank #3.
Stocks Worth a Look
Here are a few medical stocks worth considering, as these have the right combination of elements to come up with an earnings beat this reporting cycle.
ShockWave Medical (SWAV - Free Report) has an Earnings ESP of +6.07% and a Zacks Rank of 1 at present.
The stock has gained 0.6% year to date. SWAV’s earnings beat estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 81.14%.
Baxter International (BAX - Free Report) has an Earnings ESP of +3.86% and a Zacks Rank of 2 at present.
The stock has lost 36.9% year to date. BAX’s earnings missed estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 2.44%.
Avanos Medical (AVNS - Free Report) has an Earnings ESP of +3.45% and a Zacks Rank of 3 at present.
The stock has lost 34.2% year to date. AVNS’ earnings missed estimates in the last reported quarter. It has a trailing four-quarter average negative earnings surprise of 0.61%.
Image: Bigstock
What's in Store for Cardinal Health (CAH) in Q1 Earnings?
Cardinal Health, Inc. (CAH - Free Report) is scheduled to report first-quarter fiscal 2024 results on Nov 3, before the opening bell.
In the last reported quarter, the company delivered an earnings surprise of 4.73%. CAH’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 16.03%.
Q1 Estimates
For the fiscal first quarter, the consensus mark for earnings is pegged at $1.40 per share, indicating an improvement of 16.7% from the prior-year quarter’s reported figure. The same for revenues is pinned at $54.53 billion, implying growth of 9.9% year over year.
Factors to Note
Cardinal Health's Pharmaceutical segment is one of the largest pharmaceutical distributors in the United States. In the fourth quarter of fiscal 2023, revenues from this segment amounted to approximately $49.7 billion, up 15% on a year-over-year basis. The performance reflects branded pharmaceutical sales growth in the Pharmaceutical Distribution and Specialty Solutions segment, whose profit was also up 12%. This momentum is likely to have continued in the fiscal first quarter as well.
The company’s generics program sales were also strong during the last reported quarter and its upcoming results are expected to gain from this trend.
In April, Cardinal Health opened two new distribution centers in Central Ohio to support U.S. Medical Products and Distribution, and at-Home Solutions businesses. Last year, the company opened a new distribution center in the Columbus, OH area, lending support to its at-Home Solutions business.
CAH is also focused on improving patient engagement and clinical pharmacy solutions. In June, it signed an agreement to contribute its Outcomes business to BlackRock’s Transaction Data Systems for integrated offering of pharmacy workflow software using patient engagement and clinical solutions. The idea was to create additional opportunities for pharmacists and enable better access for payers.
In May, the company launched modern payment solutions to increase the operational efficiency of independent pharmacies.
These developments are likely to have favored CAH’s fiscal first-quarter performance. Moreover, new distribution centers might have helped alleviate supply-chain challenges.
For the Medical segment, a decrease in product and distribution volumes as well as pricing led to lower revenues in the previously reported quarter. Earnings were also hurt by net inflationary impacts. However, the fiscal first-quarter results are likely to reflect a recovery in the Medical segment. Revenues are expected to have grown nearly 3%. The profit is estimated to be almost $400 million in fiscal 2024, which is likely to be reflected in the soon-to-be-reported quarter.
However, demand for CAH’s at-Home Solutions remained strong during the past couple of quarters. The company launched a supply-chain network and last-mile fulfillment solution — Velocare — for providing critical products and services for hospital-level care at home. This strong performance is likely to have continued in the fiscal first quarter.
Cardinal Health, Inc. Price and Consensus
Cardinal Health, Inc. price-consensus-chart | Cardinal Health, Inc. Quote
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Cardinal Health this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here, as you will see below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($1.38 per share) and the Zacks Consensus Estimate, is -1.13% for Cardinal Health.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: Cardinal Health currently carries a Zacks Rank #3.
Stocks Worth a Look
Here are a few medical stocks worth considering, as these have the right combination of elements to come up with an earnings beat this reporting cycle.
ShockWave Medical (SWAV - Free Report) has an Earnings ESP of +6.07% and a Zacks Rank of 1 at present.
The stock has gained 0.6% year to date. SWAV’s earnings beat estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 81.14%.
Baxter International (BAX - Free Report) has an Earnings ESP of +3.86% and a Zacks Rank of 2 at present.
The stock has lost 36.9% year to date. BAX’s earnings missed estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 2.44%.
Avanos Medical (AVNS - Free Report) has an Earnings ESP of +3.45% and a Zacks Rank of 3 at present.
The stock has lost 34.2% year to date. AVNS’ earnings missed estimates in the last reported quarter. It has a trailing four-quarter average negative earnings surprise of 0.61%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.