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What's in Store for Cardinal Health (CAH) in Q2 Earnings?
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Cardinal Health, Inc. (CAH - Free Report) is scheduled to report second-quarter fiscal 2024 results on Feb 1, before the opening bell.
In the last reported quarter, the company delivered an earnings surprise of 23.57%. CAH’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 15.67%.
Q2 Estimates
For the fiscal second quarter, the consensus mark for earnings is pegged at $1.57 per share, indicating an improvement of 18.9% from the prior-year quarter’s reported figure. The same for revenues is pinned at $56.82 billion, implying growth of 10.4% year over year.
Factors to Note
Cardinal Health's Pharmaceutical segment is one of the largest pharmaceutical distributors in the United States. In the first quarter of fiscal 2024, revenues from this segment amounted to approximately $51 billion, up 11% on a year-over-year basis. The performance reflects branded pharmaceutical sales growth in the Pharmaceutical Distribution and Specialty Solutions segment, whose profit was also up 18% in the first quarter. This momentum is likely to have continued in the fiscal second quarter. Moreover, rising demand for GLP-1 medications is likely to have acted as a tailwind.
The company’s generics program sales were also strong during the last reported quarter and its upcoming results are expected to gain from this trend.
These developments are likely to have favored CAH’s fiscal second-quarter performance. Moreover, new distribution centers might have helped alleviate supply-chain challenges.
For the Medical segment, a decrease in product and distribution volumes, as well as pricing, led to lower revenues in the previously reported quarter. Earnings were also hurt by net inflationary impacts.
However, the fiscal second-quarter results are likely to reflect a recovery in the Medical segment on the back of strong demand for at-Home Solutions. Operating profit might have benefited during the fiscal second quarter due to the timing of orders. The profit is estimated to be almost $400 million in fiscal 2024, which is likely to be reflected in the upcoming quarterly results.
In September 2023, Cardinal Health launched its next-generation Kangaroo OMNI enteral feeding pump in the United States to meet personalized needs. The company had launched its next-generation NTrainer System 2.0 in August, that will help in reducing the neonatal intensive care unit length of stay for premature and newborn infants. These launches are likely to have brought additional revenues during the soon-to-be-reported quarter. CAH is expected to provide an update on the uptake of these products on its fiscal second-quarter earnings call.
Our proven model does not conclusively predict an earnings beat for Cardinal Health this time around. 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, as you will see below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($1.53 per share) and the Zacks Consensus Estimate, is -2.28% for Cardinal Health.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: Cardinal Health currently carries a Zacks Rank #2.
Stocks Worth a Look
Here are a few medical stocks worth considering, as these have the right combination of elements to come up with an earnings beat this reporting cycle.
The stock has fallen 5.2% in the past year. XRAY’s earnings beat estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 20.65%.
Merit Medical Systems (MMSI - Free Report) has an Earnings ESP of +3.68% and a Zacks Rank of 2 at present.
The stock has risen 15% in the past year. MMSI’s earnings beat estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 14.41%.
AMN Healthcare Services (AMN - Free Report) has an Earnings ESP of +3.42% and a Zacks Rank of 3 at present.
The stock has fallen 22.3% in the past year. COO’s earnings beat estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 12.66%.
Image: Bigstock
What's in Store for Cardinal Health (CAH) in Q2 Earnings?
Cardinal Health, Inc. (CAH - Free Report) is scheduled to report second-quarter fiscal 2024 results on Feb 1, before the opening bell.
In the last reported quarter, the company delivered an earnings surprise of 23.57%. CAH’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 15.67%.
Q2 Estimates
For the fiscal second quarter, the consensus mark for earnings is pegged at $1.57 per share, indicating an improvement of 18.9% from the prior-year quarter’s reported figure. The same for revenues is pinned at $56.82 billion, implying growth of 10.4% year over year.
Factors to Note
Cardinal Health's Pharmaceutical segment is one of the largest pharmaceutical distributors in the United States. In the first quarter of fiscal 2024, revenues from this segment amounted to approximately $51 billion, up 11% on a year-over-year basis. The performance reflects branded pharmaceutical sales growth in the Pharmaceutical Distribution and Specialty Solutions segment, whose profit was also up 18% in the first quarter. This momentum is likely to have continued in the fiscal second quarter. Moreover, rising demand for GLP-1 medications is likely to have acted as a tailwind.
The company’s generics program sales were also strong during the last reported quarter and its upcoming results are expected to gain from this trend.
These developments are likely to have favored CAH’s fiscal second-quarter performance. Moreover, new distribution centers might have helped alleviate supply-chain challenges.
For the Medical segment, a decrease in product and distribution volumes, as well as pricing, led to lower revenues in the previously reported quarter. Earnings were also hurt by net inflationary impacts.
However, the fiscal second-quarter results are likely to reflect a recovery in the Medical segment on the back of strong demand for at-Home Solutions. Operating profit might have benefited during the fiscal second quarter due to the timing of orders. The profit is estimated to be almost $400 million in fiscal 2024, which is likely to be reflected in the upcoming quarterly results.
In September 2023, Cardinal Health launched its next-generation Kangaroo OMNI enteral feeding pump in the United States to meet personalized needs. The company had launched its next-generation NTrainer System 2.0 in August, that will help in reducing the neonatal intensive care unit length of stay for premature and newborn infants. These launches are likely to have brought additional revenues during the soon-to-be-reported quarter. CAH is expected to provide an update on the uptake of these products on its fiscal second-quarter earnings call.
Cardinal Health, Inc. Price and EPS Surprise
Cardinal Health, Inc. price-eps-surprise | Cardinal Health, Inc. Quote
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Cardinal Health this time around. 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, as you will see below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($1.53 per share) and the Zacks Consensus Estimate, is -2.28% for Cardinal Health.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: Cardinal Health currently carries a Zacks Rank #2.
Stocks Worth a Look
Here are a few medical stocks worth considering, as these have the right combination of elements to come up with an earnings beat this reporting cycle.
Dentsply Sirona (XRAY - Free Report) has an Earnings ESP of +6.43% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The stock has fallen 5.2% in the past year. XRAY’s earnings beat estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 20.65%.
Merit Medical Systems (MMSI - Free Report) has an Earnings ESP of +3.68% and a Zacks Rank of 2 at present.
The stock has risen 15% in the past year. MMSI’s earnings beat estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 14.41%.
AMN Healthcare Services (AMN - Free Report) has an Earnings ESP of +3.42% and a Zacks Rank of 3 at present.
The stock has fallen 22.3% in the past year. COO’s earnings beat estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 12.66%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.