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Cardinal Health (CAH) to Post Q4 Earnings: What's in Store?

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Cardinal Health, Inc. (CAH - Free Report) is scheduled to report fourth-quarter fiscal 2021 results on Aug 5, before the opening bell.

In the last reported quarter, the company delivered a negative earnings surprise of 3.2%. Its earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average surprise being 15.9%.

Q4 Estimates

For the fiscal fourth quarter, the Zacks Consensus Estimate for earnings is pegged at $1.18 per share, indicating a rise of 13.5% from the prior-year quarter. The same for revenues stands at $39.94 billion, suggesting growth of 8.9% from the year-ago reported figure.

Factors to Note

Cardinal Health’s Pharmaceutical segment is the second largest pharmaceutical distributor in the United States. Elective procedures and physician office visits are expected to recover to pre-COVID 19 levels exiting fiscal 2021, with a more substantial impact in the first half of the year. This might get reflected in the segment’s results in the to-be-reported quarter.

In fact, higher contribution from key growth areas — Specialty and Connected Care — is likely to have favored the segment’s performance in the to-be-reported quarter.

Growth in sales from Pharmaceutical Distribution and Specialty Solutions customers is likely to have contributed to the aforementioned segment’s performance in the fiscal fourth quarter.

Cardinal Health’s Medical unit may have contributed significantly to the overall fiscal fourth-quarter performance. Notably, the segment manufactures products such as single-use surgical drapes, gowns and apparel, exam and surgical gloves, which may have driven sales in the to-be-reported quarter.

In the fiscal fourth quarter, revenues at this segment are likely to reflect increase in sales from personal protective equipment (PPE) and increase in volumes in its lab business.

Cardinal Health, Inc. Price and EPS Surprise

Cardinal Health, Inc. Price and EPS Surprise

Cardinal Health, Inc. price-eps-surprise | Cardinal Health, Inc. Quote

Apart from this, the company has been committed toward improving efficiencies across its Medical segment by refining commercial, operational and data capabilities. We anticipate these to get reflected in the fiscal fourth-quarter results.

Per the fiscal second-quarter earnings call, the company has been boosting its core Medical and Pharmaceutical Distribution and product capabilities as it continues to adapt the resilient business models for the future. Cardinal Health continues to show solid progress in both its segments and supply chain work streams, and generating near and long-term efficiencies. The company’s fiscal fourth-quarter results are likely to reflect the impact of the same.

However, stiff competition in each of the company’s business segments is likely to have weighed on the segment margins and consequently, might have limited profitability in the fiscal fourth quarter.

Here’s What the Quantitative Model Suggests

Per our proven model, 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.

Earnings ESP: Cardinal Health has an Earnings ESP of -0.28%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #3.

Stocks Worth a Look

Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.

DENTSPLY SIRONA Inc. (XRAY - Free Report) has an Earnings ESP of +6.77% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

DaVita Inc. (DVA - Free Report) has an Earnings ESP of +0.47% and a Zacks Rank of 3.

Avanos Medical, Inc. (AVNS - Free Report) has an Earnings ESP of +15.72% and a Zacks Rank of 3.