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What's in Store for Cardinal Health (CAH) in Q1 Earnings?
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Cardinal Health (CAH - Free Report) , a global player in the healthcare services and products space, is set to report first-quarter fiscal 2018 results on Nov 6, before the closing bell.
The company reported adjusted earnings of $1.31 per share in the last reported quarter, which beat the Zacks Consensus Estimate of $1.24 and increased 7% on a year-over-year basis. The stock delivered a positive earnings surprise in each of the trailing four quarters, with an average beat of 5.25%.
Let’s take a look at how things are shaping up prior to the fourth-quarter earnings announcement.
Factors at Play
Strong Outlook: Management at Cardinal Health is bullish about significant cash generation in the first quarter. Furthermore, the company’s Cordis business is expected to generate accretive returns in the quarter under review.
We note that despite solid commercial momentum on a global basis, the Cordis segment generated sluggish returns in the last reported quarter. However, in the first quarter, Cardinal Health is expected to leverage on the Patient Recovery business in the Cordis profile.
Meanwhile, Cardinal Health affirmed the fiscal 2018 guidance for adjusted earnings per share from continuing operations at $4.85-$5.10. The outlook represents growth of approximately 2-5% from the prior fiscal.
Pricing Pressure in Generics Portfolio: Cardinal Health has been grappling with pricing deflation in the generics segment for long. Per management, reimbursement pressure is likely to affect the company’s customer base and also impede generic launches in the near term. Incremental expenses, specifically in the Pharma segment, might dent profits in the first quarter.
Cutthroat Competition in Niche Space: Cardinal Health witnesses tough competition in each of its business segments. For example, its pharmaceutical supply chain business faces competition from several smaller medical-surgical distributors. Intensifying competition in the global markets is likely to mar Cardinal Health’s top line in the first quarter.
Estimate Revision Trend: The company’s estimate revision trend lacks luster. For the current quarter, one analyst moved south, compared with no upward revision in the last two months. Over the last three months, the current quarter estimates declined almost 6.5% to $1.01 per share, adding to concerns.
Earnings Whispers
Our proven model does not conclusively show that Cardinal Health is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates. This is not the case here, as you will see below.
Zacks ESP: The Earnings ESP for Cardinal Health is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.01. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Cardinal Health currently carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Here are a few companies you may want to consider as our proven model shows that they have the right combination of elements to post an earnings beat this quarter:
Medpace Holdings Inc (MEDP - Free Report) has an Earnings ESP of +0.47% and carries a Zacks Rank #3.
Henry Schein, Inc (HSIC - Free Report) has an Earnings ESP of +1.23% and carries a Zacks Rank #3.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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What's in Store for Cardinal Health (CAH) in Q1 Earnings?
Cardinal Health (CAH - Free Report) , a global player in the healthcare services and products space, is set to report first-quarter fiscal 2018 results on Nov 6, before the closing bell.
The company reported adjusted earnings of $1.31 per share in the last reported quarter, which beat the Zacks Consensus Estimate of $1.24 and increased 7% on a year-over-year basis. The stock delivered a positive earnings surprise in each of the trailing four quarters, with an average beat of 5.25%.
Let’s take a look at how things are shaping up prior to the fourth-quarter earnings announcement.
Factors at Play
Strong Outlook: Management at Cardinal Health is bullish about significant cash generation in the first quarter. Furthermore, the company’s Cordis business is expected to generate accretive returns in the quarter under review.
We note that despite solid commercial momentum on a global basis, the Cordis segment generated sluggish returns in the last reported quarter. However, in the first quarter, Cardinal Health is expected to leverage on the Patient Recovery business in the Cordis profile.
Meanwhile, Cardinal Health affirmed the fiscal 2018 guidance for adjusted earnings per share from continuing operations at $4.85-$5.10. The outlook represents growth of approximately 2-5% from the prior fiscal.
Pricing Pressure in Generics Portfolio: Cardinal Health has been grappling with pricing deflation in the generics segment for long. Per management, reimbursement pressure is likely to affect the company’s customer base and also impede generic launches in the near term. Incremental expenses, specifically in the Pharma segment, might dent profits in the first quarter.
Cutthroat Competition in Niche Space: Cardinal Health witnesses tough competition in each of its business segments. For example, its pharmaceutical supply chain business faces competition from several smaller medical-surgical distributors. Intensifying competition in the global markets is likely to mar Cardinal Health’s top line in the first quarter.
Estimate Revision Trend: The company’s estimate revision trend lacks luster. For the current quarter, one analyst moved south, compared with no upward revision in the last two months. Over the last three months, the current quarter estimates declined almost 6.5% to $1.01 per share, adding to concerns.
Earnings Whispers
Our proven model does not conclusively show that Cardinal Health is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates. This is not the case here, as you will see below.
Zacks ESP: The Earnings ESP for Cardinal Health is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.01. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Cardinal Health currently carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Cardinal Health, Inc. Price and EPS Surprise
Cardinal Health, Inc. Price and EPS Surprise | Cardinal Health, Inc. Quote
Stocks that Warrant a Look
Here are a few companies you may want to consider as our proven model shows that they have the right combination of elements to post an earnings beat this quarter:
INC Research Holdings, Inc (INCR - Free Report) has an Earnings ESP of +2.02% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Medpace Holdings Inc (MEDP - Free Report) has an Earnings ESP of +0.47% and carries a Zacks Rank #3.
Henry Schein, Inc (HSIC - Free Report) has an Earnings ESP of +1.23% and carries a Zacks Rank #3.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>