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Cardinal Health (CAH) Tops Q4 Earnings, '17 View Impressive
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Cardinal Health Inc. (CAH - Free Report) reported fourth-quarter fiscal 2016 adjusted earnings of $1.14 per share, which beat the Zacks Consensus Estimate by a penny and increased 14% on a year-over-year basis.
The upside was driven by 14% growth in revenues, which totaled $31.38 billion, well over the Zacks Consensus Estimate of $30.67 billion. The growth was on account of strong performance by both the Pharmaceutical and Medical segments.
In fiscal 2016, adjusted earnings increased 20% year over year to $5.24 per share based on 19% revenue growth, which totaled $121.54 billion.
Quarter Details
Pharmaceutical revenues increased 14% to $28.18 billion owing to strong growth from existing and net new distribution customers. Strong performance from the Specialty business also drove results.
Medical segment revenues increased 12% to $3.21 billion. Higher contributions from acquisitions and strong growth from Cardinal Health brand products were primarily responsible for the growth in segment revenues.
Adjusted gross profit increased 11% year over year to $1.61 billion. Gross margin was 5.14% as compared with 5.29% in the year-ago quarter.
Distribution, selling, general and administrative (SG&A) expenses increased 15% on a year-over-year basis to $970 million in the reported quarter.
Adjusted operating profit increased 5% year over year to $643 million. Operating margin was 2.05% as compared with 2.22% in the year-ago quarter.
Pharmaceutical segment profit in the quarter increased 1% to $542 million owing to contribution from acquisitions, largely negated by the loss of a large customer contract.
Medical segment profit soared 19% to $122 million, on the back of strong contribution from acquisitions and Cardinal Health Brand products
Guidance
For fiscal-year 2017, Cardinal Health anticipates revenues to increase in high-single digit percentage rate as compared with fiscal 2016. Adjusted earnings are forecasted to be in the range of $5.48 to $5.73 per share.
Pharmaceutical segment revenues are expected to increase at high-single digit percentage for fiscal 2017. Segment profit is expected to be flat on a year-over-year basis. Most of the profit will be generated in the second-half 2017.
Management at Cardinal Health forecasts double-digit revenue growth for both Specialty business and Cardinal Health China.
Medical segment revenues are predicted to increase mid-single digit percentage for fiscal 2017. Segment profit growth is estimated to be in double digit range as compared with fiscal 2016.
Cordis is expected to contribute more than 15 cents, net of transaction-related interest expense of 7-8 cents. Management forecasts above-market growth for Cardinal Health at Home. Cardinal Health Brand products are expected to post double-digit profit growth.
Zacks Rank & Other Stocks to Consider
Currently, Cardinal Health carries a Zacks Rank #4 (Sell).
Better-ranked stocks in the broader medical sector include Align Technology (ALGN - Free Report) , Merit Medical (MMSI - Free Report) and C.R. Bard . While Align Technology and Merit Medical sports a Zacks Rank #1 (Strong Buy), C.R. Bard holds a Zacks Rank #2 (Buy).
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Cardinal Health (CAH) Tops Q4 Earnings, '17 View Impressive
Cardinal Health Inc. (CAH - Free Report) reported fourth-quarter fiscal 2016 adjusted earnings of $1.14 per share, which beat the Zacks Consensus Estimate by a penny and increased 14% on a year-over-year basis.
The upside was driven by 14% growth in revenues, which totaled $31.38 billion, well over the Zacks Consensus Estimate of $30.67 billion. The growth was on account of strong performance by both the Pharmaceutical and Medical segments.
In fiscal 2016, adjusted earnings increased 20% year over year to $5.24 per share based on 19% revenue growth, which totaled $121.54 billion.
Quarter Details
Pharmaceutical revenues increased 14% to $28.18 billion owing to strong growth from existing and net new distribution customers. Strong performance from the Specialty business also drove results.
Medical segment revenues increased 12% to $3.21 billion. Higher contributions from acquisitions and strong growth from Cardinal Health brand products were primarily responsible for the growth in segment revenues.
Adjusted gross profit increased 11% year over year to $1.61 billion. Gross margin was 5.14% as compared with 5.29% in the year-ago quarter.
Distribution, selling, general and administrative (SG&A) expenses increased 15% on a year-over-year basis to $970 million in the reported quarter.
Adjusted operating profit increased 5% year over year to $643 million. Operating margin was 2.05% as compared with 2.22% in the year-ago quarter.
CARDINAL HEALTH Price, Consensus and EPS Surprise
CARDINAL HEALTH Price, Consensus and EPS Surprise | CARDINAL HEALTH Quote
Pharmaceutical segment profit in the quarter increased 1% to $542 million owing to contribution from acquisitions, largely negated by the loss of a large customer contract.
Medical segment profit soared 19% to $122 million, on the back of strong contribution from acquisitions and Cardinal Health Brand products
Guidance
For fiscal-year 2017, Cardinal Health anticipates revenues to increase in high-single digit percentage rate as compared with fiscal 2016. Adjusted earnings are forecasted to be in the range of $5.48 to $5.73 per share.
Pharmaceutical segment revenues are expected to increase at high-single digit percentage for fiscal 2017. Segment profit is expected to be flat on a year-over-year basis. Most of the profit will be generated in the second-half 2017.
Management at Cardinal Health forecasts double-digit revenue growth for both Specialty business and Cardinal Health China.
Medical segment revenues are predicted to increase mid-single digit percentage for fiscal 2017. Segment profit growth is estimated to be in double digit range as compared with fiscal 2016.
Cordis is expected to contribute more than 15 cents, net of transaction-related interest expense of 7-8 cents. Management forecasts above-market growth for Cardinal Health at Home. Cardinal Health Brand products are expected to post double-digit profit growth.
Zacks Rank & Other Stocks to Consider
Currently, Cardinal Health carries a Zacks Rank #4 (Sell).
Better-ranked stocks in the broader medical sector include Align Technology (ALGN - Free Report) , Merit Medical (MMSI - Free Report) and C.R. Bard . While Align Technology and Merit Medical sports a Zacks Rank #1 (Strong Buy), C.R. Bard holds a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>