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What's in Store for Cardinal Health's (CAH) Q1 Earnings?
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Cardinal Health, Inc.’s (CAH - Free Report) first-quarter fiscal 2019 results are scheduled for release on Nov 8, before market opens. While results are likely to show impressive growth in the core Pharmaceutical segment, headwinds in the Medical-Gloves sub-segment are likely to mar prospects.
Fiscal Q4 Results at a Glance
In the last reported quarter, Cardinal Health reported adjusted earnings of $1.01 per share, beating the Zacks Consensus Estimate of 93 cents. Adjusted earnings declined 22.9% year over year.
Revenues increased 7.2% on a year-over-year basis to $35.35 billion and beat the Zacks Consensus Estimate of $34.55 billion.
Cardinal Health has an average positive earnings surprise of 5.9% for the trailing four quarters.
Which Way Are Estimates Treading?
For the quarter to be reported, the Zacks Consensus Estimate for earnings is pegged at $1.06 per share, reflecting a decline of 2.8% year over year. The same for revenues is pinned at $33.54 billion, indicating growth of 2.8% from the year-ago quarter.
Let’s see how things are shaping up prior to the earnings release.
Pharmaceutical to Drive Fiscal Q1
Cardinal Health’s Pharmaceutical segment is the second largest pharmaceutical distributor in the United States and the largest nuclear pharmacy. Its products and services include pharmaceutical distribution, manufacturer and specialty services, and nuclear and pharmacy services.
In the last reported quarter, the segment accounted for 89% of net sales. Revenues at the segment increased 6.4% to $31.46 billion on a year-over-year basis. However, Pharmaceutical witnessed an 18% decline in profits to $416 million, thanks to generic pharmaceutical pricing.
However, it is encouraging to note that, for the quarter to be reported, the Zacks Consensus Estimate for the unit’s revenues stands at $29.85 billion, reflecting a year-over-year rise of 3.2%.
Other Factors at Play
Cardinal Health expects to see notable contributions from its Medical unit. For investors’ notice, the segment manufactures products such as single-use surgical drapes, gowns and apparel, exam and surgical gloves, etc. In the last reported quarter, the unit contributed 11% to net sales. Sales at the segment improved 14.1% year over year to $3.90 billion.
For the quarter to be reported, the Zacks Consensus Estimate is pinned at $3.98 billion, showing a year-over-year improvement of 6.9%.
However, the company has been facing challenges in the exam-glove sub-segment. In the last reported quarter, commodity pricing and supply disruptions created headwinds in the exam-glove unit. For fiscal 2019, management has lower expectations for the Medical segment due to headwinds in the exam-gloves segment, which is concerning.
What Does Our Model Say?
Per our proven model, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to deliver a positive earnings surprise in the quarter. However, this is not the case here.
Earnings ESP: Cardinal Health has an Earnings ESP of +0.63%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Cardinal Health carries a Zacks Rank #4 (Sell).
Please note that we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revision.
Stocks Worth a Look
Here are a few medical stocks worth considering as they have the right combination of elements to post an earnings beat this quarter.
PerkinElmer has an Earnings ESP of +1.45% and a Zacks Rank #3.
Weight Watchers International (WTW - Free Report) has an Earnings ESP of +3.29% and a Zacks Rank #3.
3 Medical Stocks to Buy Now
The greatest discovery in this century of biology is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating revenue, and cures for a variety of deadly diseases are in the pipeline.
So are big potential profits for early investors. Zacks has released an updated Special Report that explains this breakthrough and names the best 3 stocks to ride it.
Image: Bigstock
What's in Store for Cardinal Health's (CAH) Q1 Earnings?
Cardinal Health, Inc.’s (CAH - Free Report) first-quarter fiscal 2019 results are scheduled for release on Nov 8, before market opens. While results are likely to show impressive growth in the core Pharmaceutical segment, headwinds in the Medical-Gloves sub-segment are likely to mar prospects.
Fiscal Q4 Results at a Glance
In the last reported quarter, Cardinal Health reported adjusted earnings of $1.01 per share, beating the Zacks Consensus Estimate of 93 cents. Adjusted earnings declined 22.9% year over year.
Revenues increased 7.2% on a year-over-year basis to $35.35 billion and beat the Zacks Consensus Estimate of $34.55 billion.
Cardinal Health has an average positive earnings surprise of 5.9% for the trailing four quarters.
Which Way Are Estimates Treading?
For the quarter to be reported, the Zacks Consensus Estimate for earnings is pegged at $1.06 per share, reflecting a decline of 2.8% year over year. The same for revenues is pinned at $33.54 billion, indicating growth of 2.8% from the year-ago quarter.
Cardinal Health, Inc. Price and EPS Surprise
Cardinal Health, Inc. Price and EPS Surprise | Cardinal Health, Inc. Quote
Let’s see how things are shaping up prior to the earnings release.
Pharmaceutical to Drive Fiscal Q1
Cardinal Health’s Pharmaceutical segment is the second largest pharmaceutical distributor in the United States and the largest nuclear pharmacy. Its products and services include pharmaceutical distribution, manufacturer and specialty services, and nuclear and pharmacy services.
In the last reported quarter, the segment accounted for 89% of net sales. Revenues at the segment increased 6.4% to $31.46 billion on a year-over-year basis. However, Pharmaceutical witnessed an 18% decline in profits to $416 million, thanks to generic pharmaceutical pricing.
However, it is encouraging to note that, for the quarter to be reported, the Zacks Consensus Estimate for the unit’s revenues stands at $29.85 billion, reflecting a year-over-year rise of 3.2%.
Other Factors at Play
Cardinal Health expects to see notable contributions from its Medical unit. For investors’ notice, the segment manufactures products such as single-use surgical drapes, gowns and apparel, exam and surgical gloves, etc. In the last reported quarter, the unit contributed 11% to net sales. Sales at the segment improved 14.1% year over year to $3.90 billion.
For the quarter to be reported, the Zacks Consensus Estimate is pinned at $3.98 billion, showing a year-over-year improvement of 6.9%.
However, the company has been facing challenges in the exam-glove sub-segment. In the last reported quarter, commodity pricing and supply disruptions created headwinds in the exam-glove unit. For fiscal 2019, management has lower expectations for the Medical segment due to headwinds in the exam-gloves segment, which is concerning.
What Does Our Model Say?
Per our proven model, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to deliver a positive earnings surprise in the quarter. However, this is not the case here.
Earnings ESP: Cardinal Health has an Earnings ESP of +0.63%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Cardinal Health carries a Zacks Rank #4 (Sell).
Please note that we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revision.
Stocks Worth a Look
Here are a few medical stocks worth considering as they have the right combination of elements to post an earnings beat this quarter.
PerkinElmer has an Earnings ESP of +1.45% and a Zacks Rank #3.
Quidel Corporation (QDEL - Free Report) has an Earnings ESP of +10.55% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Weight Watchers International (WTW - Free Report) has an Earnings ESP of +3.29% and a Zacks Rank #3.
3 Medical Stocks to Buy Now
The greatest discovery in this century of biology is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating revenue, and cures for a variety of deadly diseases are in the pipeline.
So are big potential profits for early investors. Zacks has released an updated Special Report that explains this breakthrough and names the best 3 stocks to ride it.
See them today for free >>