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Cardinal Health (CAH) Q3 Earnings Lag Estimates, Revenues Top
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Cardinal Health, Inc. (CAH - Free Report) reported third-quarter fiscal 2022 adjusted earnings of $1.45 per share (EPS), which missed the Zacks Consensus Estimate of $1.54 by 5.8%. The bottom line declined 5% year over year.
GAAP loss per share in the quarter was $5.05, compared with the year-ago quarter’s earnings of 40 cents per share.
Revenue Details
Revenues improved 14% on a year-over-year basis to $44.84 billion. The top line outpaced the Zacks Consensus Estimate by 4.3%.
Segmental Analysis
Pharmaceutical Segment
In the fiscal third quarter, pharmaceutical revenues amounted to $40.96 billion, up 17% on a year-over-year basis. The performance highlights branded pharmaceutical sales growth from existing and net new Pharmaceutical Distribution and Specialty Solutions customers.
Pharmaceutical profit was $487 million, down 5% on a year-over-year basis. The downside was due to an increase in operations expenditure and previously expected investments in technology enhancements, partially offset by generics program performance.
Cardinal Health, Inc. Price, Consensus and EPS Surprise
In the quarter under review, revenues at this segment fell 7% to $3.88 billion due to the divestiture of the Cordis business as well as a decrease in products and distribution volumes, which includes the impact of global supply chain challenges.
The company reported a profit of $59 million in the Medical segment, which plunged 66% from the year-ago quarter primarily due to net inflationary impacts and global supply chain restrictions in products and distribution.
Margin Analysis
Gross profit fell 7% year over year to $1.68 billion.
As a percentage of revenues, gross margin in the reported quarter was 3.8%, down 80 basis points (bps) on a year-over-year basis.
Distribution, selling, general and administrative expenses totaled $1.14 billion, up 2% year over year.
The company reported an operating loss of $97 million in the quarter under review against the year-ago quarter’s income of $473 million.
Financial Update
The company exited the quarter with cash and cash equivalents of $2.36 billion, compared with $3.16 billion on a sequential basis. Cumulative net cash used in operating activities totaled $130 million at the end of the fiscal third quarter, compared with net cash provided of $1.76 billion in the year-ago quarter.
2022 Guidance Revised
Cardinal Health updated its fiscal 2022 outlook. The company anticipates adjusted earnings per share between $5.15 and $5.25 (compared to the previously guided range of $5.15 and $5.50). The Zacks Consensus Estimate is pegged at $5.27 per share.
Conclusion
Cardinal Health exited the fiscal third quarter on a mixed note, wherein earnings missed the consensus mark, but revenues beat the same. The company witnessed revenue growth in its Pharmaceutical in the quarter under review.
Plans to build a new medical distribution center in the central Ohio area, partnership with Innara Health and Kinaxis, and the introduction of the first surgical incise drape are the highlights of the quarter under review.
However, intense competition and customer concentration are other concerns. Weakness in the Medical segment is a woe. Contraction in gross margin remains a headwind.
Zacks Rank
Currently, Cardinal Health carries a Zacks Rank #4 (Sell).
Key Picks
Some better-ranked stocks in the broader medical space that have announced quarterly results are Omnicell, Inc. (OMCL - Free Report) , UnitedHealth Group Incorporated (UNH - Free Report) and Alkermes plc (ALKS - Free Report) .
Omnicell, carrying a Zacks Rank #2 (Buy), reported first-quarter 2022 adjusted EPS of 83 cents, which beat the Zacks Consensus Estimate by 16.9%. Revenues of $318.8 million outpaced the consensus mark by 0.7%. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Omnicell has an estimated long-term growth rate of 16%. OMCL's earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 13.4%.
UnitedHealth, carrying a Zacks Rank #2, reported first-quarter 2022 adjusted EPS of $5.49, which beat the Zacks Consensus Estimate by 1.7%. Revenues of $80.1 billion outpaced the consensus mark by 1.9%.
UnitedHealth has an estimated long-term growth rate of 14.8%. UNH's earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.7%.
Alkermes reported first-quarter 2022 adjusted EPS of 12 cents, which beat the Zacks Consensus Estimate of a penny. First-quarter revenues of $278.6 million outpaced the Zacks Consensus Estimate by 6.2%. It currently sports a Zacks Rank #1.
Alkermes has an estimated long-term growth rate of 25.1%. ALKS' earnings surpassed estimates in each of the trailing four quarters, the average surprise being 350.5%.
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Cardinal Health (CAH) Q3 Earnings Lag Estimates, Revenues Top
Cardinal Health, Inc. (CAH - Free Report) reported third-quarter fiscal 2022 adjusted earnings of $1.45 per share (EPS), which missed the Zacks Consensus Estimate of $1.54 by 5.8%. The bottom line declined 5% year over year.
GAAP loss per share in the quarter was $5.05, compared with the year-ago quarter’s earnings of 40 cents per share.
Revenue Details
Revenues improved 14% on a year-over-year basis to $44.84 billion. The top line outpaced the Zacks Consensus Estimate by 4.3%.
Segmental Analysis
Pharmaceutical Segment
In the fiscal third quarter, pharmaceutical revenues amounted to $40.96 billion, up 17% on a year-over-year basis. The performance highlights branded pharmaceutical sales growth from existing and net new Pharmaceutical Distribution and Specialty Solutions customers.
Pharmaceutical profit was $487 million, down 5% on a year-over-year basis. The downside was due to an increase in operations expenditure and previously expected investments in technology enhancements, partially offset by generics program performance.
Cardinal Health, Inc. Price, Consensus and EPS Surprise
Cardinal Health, Inc. price-consensus-eps-surprise-chart | Cardinal Health, Inc. Quote
Medical Segment
In the quarter under review, revenues at this segment fell 7% to $3.88 billion due to the divestiture of the Cordis business as well as a decrease in products and distribution volumes, which includes the impact of global supply chain challenges.
The company reported a profit of $59 million in the Medical segment, which plunged 66% from the year-ago quarter primarily due to net inflationary impacts and global supply chain restrictions in products and distribution.
Margin Analysis
Gross profit fell 7% year over year to $1.68 billion.
As a percentage of revenues, gross margin in the reported quarter was 3.8%, down 80 basis points (bps) on a year-over-year basis.
Distribution, selling, general and administrative expenses totaled $1.14 billion, up 2% year over year.
The company reported an operating loss of $97 million in the quarter under review against the year-ago quarter’s income of $473 million.
Financial Update
The company exited the quarter with cash and cash equivalents of $2.36 billion, compared with $3.16 billion on a sequential basis.
Cumulative net cash used in operating activities totaled $130 million at the end of the fiscal third quarter, compared with net cash provided of $1.76 billion in the year-ago quarter.
2022 Guidance Revised
Cardinal Health updated its fiscal 2022 outlook. The company anticipates adjusted earnings per share between $5.15 and $5.25 (compared to the previously guided range of $5.15 and $5.50). The Zacks Consensus Estimate is pegged at $5.27 per share.
Conclusion
Cardinal Health exited the fiscal third quarter on a mixed note, wherein earnings missed the consensus mark, but revenues beat the same. The company witnessed revenue growth in its Pharmaceutical in the quarter under review.
Plans to build a new medical distribution center in the central Ohio area, partnership with Innara Health and Kinaxis, and the introduction of the first surgical incise drape are the highlights of the quarter under review.
However, intense competition and customer concentration are other concerns. Weakness in the Medical segment is a woe. Contraction in gross margin remains a headwind.
Zacks Rank
Currently, Cardinal Health carries a Zacks Rank #4 (Sell).
Key Picks
Some better-ranked stocks in the broader medical space that have announced quarterly results are Omnicell, Inc. (OMCL - Free Report) , UnitedHealth Group Incorporated (UNH - Free Report) and Alkermes plc (ALKS - Free Report) .
Omnicell, carrying a Zacks Rank #2 (Buy), reported first-quarter 2022 adjusted EPS of 83 cents, which beat the Zacks Consensus Estimate by 16.9%. Revenues of $318.8 million outpaced the consensus mark by 0.7%. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Omnicell has an estimated long-term growth rate of 16%. OMCL's earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 13.4%.
UnitedHealth, carrying a Zacks Rank #2, reported first-quarter 2022 adjusted EPS of $5.49, which beat the Zacks Consensus Estimate by 1.7%. Revenues of $80.1 billion outpaced the consensus mark by 1.9%.
UnitedHealth has an estimated long-term growth rate of 14.8%. UNH's earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.7%.
Alkermes reported first-quarter 2022 adjusted EPS of 12 cents, which beat the Zacks Consensus Estimate of a penny. First-quarter revenues of $278.6 million outpaced the Zacks Consensus Estimate by 6.2%. It currently sports a Zacks Rank #1.
Alkermes has an estimated long-term growth rate of 25.1%. ALKS' earnings surpassed estimates in each of the trailing four quarters, the average surprise being 350.5%.