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Cardinal Health (CAH) Q2 Earnings Beat Estimates, Rise Y/Y
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Cardinal Health Inc. (CAH - Free Report) reported second-quarter fiscal 2017 adjusted earnings of $1.34 per share, which beat the Zacks Consensus Estimate of $1.24 and increased 3% on a year-over-year basis.
Revenues increased 5% on a year-over-year basis to $33.1 billion. The figure however came below the Zacks Consensus Estimate of $33.4 billion.
Stock Performance
Over the last three months, the stock added 16.22%, higher than the Zacks classified Medical - Dental Supplies sub-industry’s gain of almost 5.71%. Also, the current level compares favorably with the S&P 500’s return of 9.94% over the same time frame.
Added to this, a long-term expected earnings growth rate of 9.57% instills confidence in investors.
Cardinal Health, Inc. Price, Consensus and EPS Surprise
Pharmaceutical revenues increased 5% to $29.7 billion due to strong growth from existing and net new distribution customers. Strong performance by the Specialty business also drove results.
Medical segment revenues increased 8% to $3.4 billion. Higher contribution from acquisitions and net new and existing customers were primarily responsible for the growth in Medical segment revenues.
Pharmaceutical segment profit in the quarter decreased 14% to $537 million due to generic pharmaceutical pricing and the loss of a large Pharmaceutical Distribution customer. This was partially offset by solid performance by Red Oak Sourcing.
Medical segment profit soared 50% to $159 million due to higher contribution from Cardinal Health Brand products.
Distribution, selling, general and administrative (SG&A) expenses decreased 1% on a year-over-year basis to $910 million in the reported quarter. Net income declined 11% to $633 million from last fiscal year's $709 million.
Financial Condition
Cash and cash equivalents were $1.88 billion as of Dec 31, 2016 compared with $2.36 billion as of Jun 30, 2016. Long-term debt was $4.86 billion as of Dec 31, 2016 compared with the Jun 30, 2016 level of $4.95 billion.
Guidance
Based on fiscal second-quarter results, the company lowered its fiscal 2017 guidance range for adjusted earnings per share from continuing operations to $5.35 to $5.50 from $5.40 to $5.60. The outlook represents growth of approximately 2% to 5% from the prior fiscal year.
Zacks Rank & Stocks to Consider
Currently, Cardinal Health carries a Zacks Rank #3 (Hold).
Glaukos gained over 100% in the last one year in comparison to the S&P 500’s gain of only 19.7%. The company has a stellar four-quarter average earnings surprise of over 100%.
Cardiovascular Systems surged over 100% in the last one year in comparison to the S&P 500. It has a four-quarter average earnings surprise of 67.8%.
Neogen gained 26.0% in the past one year, better than the S&P 500 mark. The stock has impressive earnings growth of 16.7% for the next five years compared with the industry average of 15.2%.
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Cardinal Health (CAH) Q2 Earnings Beat Estimates, Rise Y/Y
Cardinal Health Inc. (CAH - Free Report) reported second-quarter fiscal 2017 adjusted earnings of $1.34 per share, which beat the Zacks Consensus Estimate of $1.24 and increased 3% on a year-over-year basis.
Revenues increased 5% on a year-over-year basis to $33.1 billion. The figure however came below the Zacks Consensus Estimate of $33.4 billion.
Stock Performance
Over the last three months, the stock added 16.22%, higher than the Zacks classified Medical - Dental Supplies sub-industry’s gain of almost 5.71%. Also, the current level compares favorably with the S&P 500’s return of 9.94% over the same time frame.
Added to this, a long-term expected earnings growth rate of 9.57% instills confidence in investors.
Cardinal Health, Inc. Price, Consensus and EPS Surprise
Cardinal Health, Inc. Price, Consensus and EPS Surprise | Cardinal Health, Inc. Quote
Quarter Details
Pharmaceutical revenues increased 5% to $29.7 billion due to strong growth from existing and net new distribution customers. Strong performance by the Specialty business also drove results.
Medical segment revenues increased 8% to $3.4 billion. Higher contribution from acquisitions and net new and existing customers were primarily responsible for the growth in Medical segment revenues.
Pharmaceutical segment profit in the quarter decreased 14% to $537 million due to generic pharmaceutical pricing and the loss of a large Pharmaceutical Distribution customer. This was partially offset by solid performance by Red Oak Sourcing.
Medical segment profit soared 50% to $159 million due to higher contribution from Cardinal Health Brand products.
Distribution, selling, general and administrative (SG&A) expenses decreased 1% on a year-over-year basis to $910 million in the reported quarter. Net income declined 11% to $633 million from last fiscal year's $709 million.
Financial Condition
Cash and cash equivalents were $1.88 billion as of Dec 31, 2016 compared with $2.36 billion as of Jun 30, 2016. Long-term debt was $4.86 billion as of Dec 31, 2016 compared with the Jun 30, 2016 level of $4.95 billion.
Guidance
Based on fiscal second-quarter results, the company lowered its fiscal 2017 guidance range for adjusted earnings per share from continuing operations to $5.35 to $5.50 from $5.40 to $5.60. The outlook represents growth of approximately 2% to 5% from the prior fiscal year.
Zacks Rank & Stocks to Consider
Currently, Cardinal Health carries a Zacks Rank #3 (Hold).
Better-ranked medical stocks are Glaukos Corporation (GKOS - Free Report) , Cardiovascular Systems and Neogen Corp. (NEOG - Free Report) . Glaukos sports a Zacks Rank #1 (Strong Buy) while Cardiovascular Systems and Neogen carry a Zacks Rank #2. ou can see the complete list of today’s Zacks #1 Rank stocks here.
Glaukos gained over 100% in the last one year in comparison to the S&P 500’s gain of only 19.7%. The company has a stellar four-quarter average earnings surprise of over 100%.
Cardiovascular Systems surged over 100% in the last one year in comparison to the S&P 500. It has a four-quarter average earnings surprise of 67.8%.
Neogen gained 26.0% in the past one year, better than the S&P 500 mark. The stock has impressive earnings growth of 16.7% for the next five years compared with the industry average of 15.2%.
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In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>