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Cardinal Health (CAH) Q2 Earnings Top, EPS Outlook Raised
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Cardinal Health, Inc. (CAH - Free Report) reported second-quarter fiscal 2023 adjusted earnings of $1.32 per share (EPS), which beat the Zacks Consensus Estimate of $1.13 by 16.8%. The bottom line improved 4% year over year.
GAAP loss per share in the quarter was 50 cents against the year-ago quarter’s earnings of 17 cents per share. The significant decline in the second quarter was due to a non-cash, pre-tax goodwill impairment of $709 million related to the Medical segment.
Revenue Details
Revenues improved 13% on a year-over-year basis to $51.5 billion. The top line outpaced the Zacks Consensus Estimate by 2.1%.
Segmental Analysis
Pharmaceutical Segment
In the fiscal second-quarter, pharmaceutical revenues amounted to $47.7 billion, up 15% on a year-over-year basis. The performance highlights branded pharmaceutical sales growth from existing and new Pharmaceutical Distribution and Specialty Solutions customers.
Pharmaceutical profit was $464 million, up 9% on a year-over-year basis. The upside was driven by generics program performance and a higher contribution from the brand sales mix, partially offset by rising supply chain costs.
Cardinal Health, Inc. Price, Consensus and EPS Surprise
In the quarter under review, revenues at this segment fell 7% to $3.8 billion as lower Products and Distribution sales were partially offset by growth in at-Home Solutions.
The company reported a profit of $17 million in the Medical segment, compared with a profit of $50 million in the year-ago quarter. The company recorded a loss during the quarter, primarily due to net inflationary impacts on products and distribution, and lower volume.
Margin Analysis
Gross profit was up 2.9% year over year to $1.66 billion.
As a percentage of revenues, the gross margin in the reported quarter was 3.2%, down approximately 35 basis points (bps) on a year-over-year basis.
Distribution, selling, general and administrative expenses totaled $1.2 billion, up 3.5% year over year.
The company reported an operating loss of $119 million in the quarter under review, compared with the year-ago quarter’s loss of $950 million.
Financial Update
The company exited the quarter with cash and cash equivalents of $3.65 billion, compared with $3.49 billion in the fiscal first quarter of 2023.
Cumulative net cash provided by operating activities totaled $597 million at the end of the fiscal second quarter, compared with $1.2 billion in the year-ago period.
2023 Guidance Raised
Cardinal Health raised its fiscal 2023 view for earnings. The company now anticipates adjusted earnings per share between $5.20 and $5.50, up from previous range of $5.05 and $5.40. The Zacks Consensus Estimate is pegged at $5.30 per share.
Conclusion
Cardinal Health exited the fiscal second quarter on a strong note with better-than-expected earnings and revenues. The company witnessed revenue growth in its Pharmaceutical segment in the quarter under review.
However, intense competition and customer concentration are concerns. Weakness in the Medical segment is a woe. Contraction in gross margin also remains a headwind.
Zacks Rank and Key Picks
Cardinal Health carries a Zacks Rank #2 (Buy) at present.
Some other stocks in the broader medical space that have announced quarterly results are Neogen Corporation (NEOG - Free Report) , McKesson Corporation (MCK - Free Report) and Hologic, Inc. (HOLX - Free Report) .
Neogen, carrying a Zacks Rank #2, reported second-quarter fiscal 2023 adjusted EPS of 15 cents, beating the Zacks Consensus Estimate of loss of 8 cents per share. Revenues of $230 million outpaced the consensus mark by 0.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Neogen has an earnings yield of 2.5% compared with the industry’s 0.2%. NEOG’s earnings surpassed estimates in two of the trailing four quarters and missed the same in two, the average being 70.11%.
McKesson, having a Zacks Rank #2, reported third-quarter 2023 adjusted EPS of $6.90, which beat the Zacks Consensus Estimate by 8.8%. Revenues of $70.49 billion outpaced the consensus mark by 0.02%.
McKesson has a long-term estimated growth rate of 10.1%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in two, the average being 4.79%.
Hologic reported first-quarter 2023 adjusted earnings of $1.07 per share, beating the Zacks Consensus Estimate by 18.9%. Revenues of $1.07 billion surpassed the Zacks Consensus Estimate by 9.5%. It currently sports a Zacks Rank #1.
Hologic has an estimated long-term growth rate of 15.2%. HOLX’s earnings surpassed estimates in the trailing four quarters, the average surprise being 46.08%.
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Cardinal Health (CAH) Q2 Earnings Top, EPS Outlook Raised
Cardinal Health, Inc. (CAH - Free Report) reported second-quarter fiscal 2023 adjusted earnings of $1.32 per share (EPS), which beat the Zacks Consensus Estimate of $1.13 by 16.8%. The bottom line improved 4% year over year.
GAAP loss per share in the quarter was 50 cents against the year-ago quarter’s earnings of 17 cents per share. The significant decline in the second quarter was due to a non-cash, pre-tax goodwill impairment of $709 million related to the Medical segment.
Revenue Details
Revenues improved 13% on a year-over-year basis to $51.5 billion. The top line outpaced the Zacks Consensus Estimate by 2.1%.
Segmental Analysis
Pharmaceutical Segment
In the fiscal second-quarter, pharmaceutical revenues amounted to $47.7 billion, up 15% on a year-over-year basis. The performance highlights branded pharmaceutical sales growth from existing and new Pharmaceutical Distribution and Specialty Solutions customers.
Pharmaceutical profit was $464 million, up 9% on a year-over-year basis. The upside was driven by generics program performance and a higher contribution from the brand sales mix, partially offset by rising supply chain costs.
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 $3.8 billion as lower Products and Distribution sales were partially offset by growth in at-Home Solutions.
The company reported a profit of $17 million in the Medical segment, compared with a profit of $50 million in the year-ago quarter. The company recorded a loss during the quarter, primarily due to net inflationary impacts on products and distribution, and lower volume.
Margin Analysis
Gross profit was up 2.9% year over year to $1.66 billion.
As a percentage of revenues, the gross margin in the reported quarter was 3.2%, down approximately 35 basis points (bps) on a year-over-year basis.
Distribution, selling, general and administrative expenses totaled $1.2 billion, up 3.5% year over year.
The company reported an operating loss of $119 million in the quarter under review, compared with the year-ago quarter’s loss of $950 million.
Financial Update
The company exited the quarter with cash and cash equivalents of $3.65 billion, compared with $3.49 billion in the fiscal first quarter of 2023.
Cumulative net cash provided by operating activities totaled $597 million at the end of the fiscal second quarter, compared with $1.2 billion in the year-ago period.
2023 Guidance Raised
Cardinal Health raised its fiscal 2023 view for earnings. The company now anticipates adjusted earnings per share between $5.20 and $5.50, up from previous range of $5.05 and $5.40. The Zacks Consensus Estimate is pegged at $5.30 per share.
Conclusion
Cardinal Health exited the fiscal second quarter on a strong note with better-than-expected earnings and revenues. The company witnessed revenue growth in its Pharmaceutical segment in the quarter under review.
However, intense competition and customer concentration are concerns. Weakness in the Medical segment is a woe. Contraction in gross margin also remains a headwind.
Zacks Rank and Key Picks
Cardinal Health carries a Zacks Rank #2 (Buy) at present.
Some other stocks in the broader medical space that have announced quarterly results are Neogen Corporation (NEOG - Free Report) , McKesson Corporation (MCK - Free Report) and Hologic, Inc. (HOLX - Free Report) .
Neogen, carrying a Zacks Rank #2, reported second-quarter fiscal 2023 adjusted EPS of 15 cents, beating the Zacks Consensus Estimate of loss of 8 cents per share. Revenues of $230 million outpaced the consensus mark by 0.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Neogen has an earnings yield of 2.5% compared with the industry’s 0.2%. NEOG’s earnings surpassed estimates in two of the trailing four quarters and missed the same in two, the average being 70.11%.
McKesson, having a Zacks Rank #2, reported third-quarter 2023 adjusted EPS of $6.90, which beat the Zacks Consensus Estimate by 8.8%. Revenues of $70.49 billion outpaced the consensus mark by 0.02%.
McKesson has a long-term estimated growth rate of 10.1%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in two, the average being 4.79%.
Hologic reported first-quarter 2023 adjusted earnings of $1.07 per share, beating the Zacks Consensus Estimate by 18.9%. Revenues of $1.07 billion surpassed the Zacks Consensus Estimate by 9.5%. It currently sports a Zacks Rank #1.
Hologic has an estimated long-term growth rate of 15.2%. HOLX’s earnings surpassed estimates in the trailing four quarters, the average surprise being 46.08%.