Cardinal Health Inc. (CAH - Free Report) reported second-quarter fiscal 2017 adjusted earnings of $1.34 per share, which beat the Zacks Consensus Estimate of $1.24 and increased 3% on a year-over-year basis.
Revenues increased 5% on a year-over-year basis to $33.1 billion. The figure however came below the Zacks Consensus Estimate of $33.4 billion.
Stock Performance
Over the last three months, the stock added 16.22%, higher than the Zacks classified Medical - Dental Supplies sub-industry’s gain of almost 5.71%. Also, the current level compares favorably with the S&P 500’s return of 9.94% over the same time frame.
Added to this, a long-term expected earnings growth rate of 9.57% instills confidence in investors.
Quarter Details
Pharmaceutical revenues increased 5% to $29.7 billion due to strong growth from existing and net new distribution customers. Strong performance by the Specialty business also drove results.
Medical segment revenues increased 8% to $3.4 billion. Higher contribution from acquisitions and net new and existing customers were primarily responsible for the growth in Medical segment revenues.
Pharmaceutical segment profit in the quarter decreased 14% to $537 million due to generic pharmaceutical pricing and the loss of a large Pharmaceutical Distribution customer. This was partially offset by solid performance by Red Oak Sourcing.
Medical segment profit soared 50% to $159 million due to higher contribution from Cardinal Health Brand products.
Distribution, selling, general and administrative (SG&A) expenses decreased 1% on a year-over-year basis to $910 million in the reported quarter. Net income declined 11% to $633 million from last fiscal year's $709 million.
Financial Condition
Cash and cash equivalents were $1.88 billion as of Dec 31, 2016 compared with $2.36 billion as of Jun 30, 2016. Long-term debt was $4.86 billion as of Dec 31, 2016 compared with the Jun 30, 2016 level of $4.95 billion.
Guidance
Based on fiscal second-quarter results, the company lowered its fiscal 2017 guidance range for adjusted earnings per share from continuing operations to $5.35 to $5.50 from $5.40 to $5.60. The outlook represents growth of approximately 2% to 5% from the prior fiscal year.
Zacks Rank & Stocks to Consider
Currently, Cardinal Health carries a Zacks Rank #3 (Hold).
Better-ranked medical stocks are Glaukos Corporation (GKOS - Free Report) , Cardiovascular Systems and Neogen Corp. (NEOG - Free Report) . Glaukos sports a Zacks Rank #1 (Strong Buy) while Cardiovascular Systems and Neogen carry a Zacks Rank #2. ou can see the complete list of today’s Zacks #1 Rank stocks here.
Glaukos gained over 100% in the last one year in comparison to the S&P 500’s gain of only 19.7%. The company has a stellar four-quarter average earnings surprise of over 100%.
Cardiovascular Systems surged over 100% in the last one year in comparison to the S&P 500. It has a four-quarter average earnings surprise of 67.8%.
Neogen gained 26.0% in the past one year, better than the S&P 500 mark. The stock has impressive earnings growth of 16.7% for the next five years compared with the industry average of 15.2%.
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Cardinal Health Inc. (CAH - Free Report) reported second-quarter fiscal 2017 adjusted earnings of $1.34 per share, which beat the Zacks Consensus Estimate of $1.24 and increased 3% on a year-over-year basis.
Revenues increased 5% on a year-over-year basis to $33.1 billion. The figure however came below the Zacks Consensus Estimate of $33.4 billion.
Stock Performance
Over the last three months, the stock added 16.22%, higher than the Zacks classified Medical - Dental Supplies sub-industry’s gain of almost 5.71%. Also, the current level compares favorably with the S&P 500’s return of 9.94% over the same time frame.
Added to this, a long-term expected earnings growth rate of 9.57% instills confidence in investors.
Quarter Details
Pharmaceutical revenues increased 5% to $29.7 billion due to strong growth from existing and net new distribution customers. Strong performance by the Specialty business also drove results.
Medical segment revenues increased 8% to $3.4 billion. Higher contribution from acquisitions and net new and existing customers were primarily responsible for the growth in Medical segment revenues.
Pharmaceutical segment profit in the quarter decreased 14% to $537 million due to generic pharmaceutical pricing and the loss of a large Pharmaceutical Distribution customer. This was partially offset by solid performance by Red Oak Sourcing.
Medical segment profit soared 50% to $159 million due to higher contribution from Cardinal Health Brand products.
Distribution, selling, general and administrative (SG&A) expenses decreased 1% on a year-over-year basis to $910 million in the reported quarter. Net income declined 11% to $633 million from last fiscal year's $709 million.
Financial Condition
Cash and cash equivalents were $1.88 billion as of Dec 31, 2016 compared with $2.36 billion as of Jun 30, 2016. Long-term debt was $4.86 billion as of Dec 31, 2016 compared with the Jun 30, 2016 level of $4.95 billion.
Guidance
Based on fiscal second-quarter results, the company lowered its fiscal 2017 guidance range for adjusted earnings per share from continuing operations to $5.35 to $5.50 from $5.40 to $5.60. The outlook represents growth of approximately 2% to 5% from the prior fiscal year.
Zacks Rank & Stocks to Consider
Currently, Cardinal Health carries a Zacks Rank #3 (Hold).
Better-ranked medical stocks are Glaukos Corporation (GKOS - Free Report) , Cardiovascular Systems and Neogen Corp. (NEOG - Free Report) . Glaukos sports a Zacks Rank #1 (Strong Buy) while Cardiovascular Systems and Neogen carry a Zacks Rank #2. ou can see the complete list of today’s Zacks #1 Rank stocks here.
Glaukos gained over 100% in the last one year in comparison to the S&P 500’s gain of only 19.7%. The company has a stellar four-quarter average earnings surprise of over 100%.
Cardiovascular Systems surged over 100% in the last one year in comparison to the S&P 500. It has a four-quarter average earnings surprise of 67.8%.
Neogen gained 26.0% in the past one year, better than the S&P 500 mark. The stock has impressive earnings growth of 16.7% for the next five years compared with the industry average of 15.2%.
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In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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