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CAH Gains on Q3 Earnings Beat, '26 EPS View Up Despite Revenue Miss
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Key Takeaways
Cardinal Health Q3 EPS beat estimates, rising 35% YoY, while revenues grew 11% but missed forecasts.
CAH growth was driven by strong pharma and specialty sales, with segment profit up 18% year over year.
CAH raised FY2026 EPS outlook to $10.70-$10.80, signaling 30-31% growth and stronger segment gains.
Cardinal Health, Inc. (CAH - Free Report) reported third-quarter fiscal 2026 adjusted earnings per share (EPS) of $3.17, which beat the Zacks Consensus Estimate of $2.80 by 13.2%. The bottom line also improved 35% year over year.
GAAP EPS in the quarter was $1.69 compared with $2.10 in the year-ago period.
Revenue Details
Sales were up 11% on a year-over-year basis to $60.94 billion. The top line missed the Zacks Consensus Estimate by 2.3%.
Cardinal Health, Inc. Price, Consensus and EPS Surprise
Pharmaceutical revenues were up 11% to $56.11 billion on a year-over-year basis. This rise was driven by brand and specialty pharmaceutical sales growth from existing customers.
Pharmaceutical profit totaled $784 million, up 18% from the year-ago period’s level. This upside was driven by contributions from brand and specialty products and positive generics program performance.
Global Medical Products and Distribution
Revenues in this segment totaled $3.15 billion, remained flat on a year-over-year basis, and reflected lower distribution volumes, offset by Cardinal Health brand growth.
The segment reported a profit of $25 million, down 36% from the year-ago period’s level, primarily due to the adverse net impact of tariffs.
Other
This segment includes three operating segments — at-Home Solutions, Nuclear and Precision Health Solutions, and OptiFreight Logistics. Sales totaled $1.71 billion, up 31% year over year.
The segment’s profit amounted to $179 million, up 34% from the year-ago level. This upside was driven by robust performance across the three operating segments.
Margin Analysis
Gross profit increased 17.7% year over year to $2.5 billion.
As a percentage of revenues, the gross margin in the reported quarter was 4.1%, up almost 20 basis points year over year.
Distribution, selling, general and administrative expenses totaled $1.54 billion, up 17.3% year over year.
Operating income amounted to $509 million, down 30.3% year over year. Adjusted operating income increased 18.5% year over year to $956 million.
Financial Update
The company exited the reported quarter with cash and cash equivalents of $3.94 billion compared with $2.78 billion in the fiscal second quarter.
Net cash provided by operating activities totaled $3.48 billion compared with $877 million in the year-ago period.
2026 View Raised
Cardinal Health raised its fiscal 2026 earnings guidance. The company anticipates adjusted EPS to be between $10.70 and $10.80 (30-31% growth), up from the previous outlook of $10.15 to $10.35. The Zacks Consensus Estimate for the same is pegged at $10.32.
The company continues to expect revenues from its Pharmaceutical segment to grow 15-17% year over year. Segmental profit is likely to increase 22-23%, up from the previous guidance of 20-22%.
Revenues from the Medical segment are estimated to grow 1-3%. Segmental profit is expected to be approximately $150 million.
Revenues from the Other segment are likely to grow 26-28%. Segmental profit is now expected to increase 36-38% compared with the previous guidance of 33-35%.
Conclusion
Cardinal Health delivered mixed third-quarter fiscal 2026 results, wherein earnings beat estimates while revenues missed the same. Quarterly performance was driven by operating growth within Pharmaceutical and Specialty Solutions, which benefited from resilient demand and continued expansion in specialty distribution. The company’s growth businesses also contributed significantly, reflecting ongoing momentum in at-Home Solutions, Nuclear and Precision Health Solutions and physician support platforms, while Global Medical Products and Distribution showed steady improvement in better volumes and execution initiatives.
Shares of CAH were up 0.4% in pre-market trading. The company’s shares have lost 1.3% in the year-to-date period compared with the industry’s 6.1% decline. The S&P 500 Index has gained 4.5% in the same timeframe.
Image Source: Zacks Investment Research
Cardinal Health continues to expand its capabilities in specialty care and physician enablement. The recent acquisition of Solaris Health significantly strengthens its presence in the urology space, adding more than 750 providers across 250 locations in 14 states. This move enhances The Specialty Alliance’s multi-specialty platform, which now reaches approximately 3,000 providers across 33 states. In addition, the collaboration between Specialty Networks and The Specialty Alliance to support real-world clinical studies highlights the company’s growing role in data-driven healthcare solutions.
The company is investing in innovation, including the expansion of Actinium-225 production capabilities at the Nuclear and Precision Health Solutions Center for Theranostics Advancement, positioning it to support the development of next-generation targeted therapies. At the same time, Cardinal Health maintains a disciplined capital allocation strategy, having reduced debt and achieved its leverage target range ahead of schedule, while returning significant capital to shareholders through $1.0 billion in share repurchases year to date and dividend payments.
With sustained strength in its core segments, continued expansion in specialty platforms and a raised fiscal 2026 outlook, Cardinal Health remains well-positioned for continued growth and long-term value creation.
CAH’s Zacks Rank and Other Key Picks
Cardinal Health carries a Zacks Rank #2 (Buy) at present.
Globus Medical’s shares have gained 1.4% in the year-to-date period. Estimates for the company’s first-quarter 2026 EPS have increased 1 cent to 92 cents in the past 30 days. GMED’s earnings beat estimates in three of the trailing four quarters and missed once, delivering an average surprise of 18.79%. In the last reported quarter, it posted an earnings surprise of 20.75%.
Estimates for Phibro Animal Health’s third-quarter fiscal 2026 EPS have remained constant at 72 cents in the past 30 days. Shares of the company have risen 41.1% in the year-to-date period. PAHC’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 20.15%. In the last reported quarter, it delivered an earnings surprise of 26.09%.
Encompass Health’s shares have lost 3.3% in the year-to-date period. Estimates for the company’s first-quarter 2026 EPS have remained constant at $1.51 in the past 30 days. EHC’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 12.09%. In the last reported quarter, it posted an earnings surprise of 13.18%.
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CAH Gains on Q3 Earnings Beat, '26 EPS View Up Despite Revenue Miss
Key Takeaways
Cardinal Health, Inc. (CAH - Free Report) reported third-quarter fiscal 2026 adjusted earnings per share (EPS) of $3.17, which beat the Zacks Consensus Estimate of $2.80 by 13.2%. The bottom line also improved 35% year over year.
GAAP EPS in the quarter was $1.69 compared with $2.10 in the year-ago period.
Revenue Details
Sales were up 11% on a year-over-year basis to $60.94 billion. The top line missed the Zacks Consensus Estimate by 2.3%.
Cardinal Health, Inc. Price, Consensus and EPS Surprise
Cardinal Health, Inc. price-consensus-eps-surprise-chart | Cardinal Health, Inc. Quote
Segmental Analysis
Pharmaceutical and Specialty Solutions
Pharmaceutical revenues were up 11% to $56.11 billion on a year-over-year basis. This rise was driven by brand and specialty pharmaceutical sales growth from existing customers.
Pharmaceutical profit totaled $784 million, up 18% from the year-ago period’s level. This upside was driven by contributions from brand and specialty products and positive generics program performance.
Global Medical Products and Distribution
Revenues in this segment totaled $3.15 billion, remained flat on a year-over-year basis, and reflected lower distribution volumes, offset by Cardinal Health brand growth.
The segment reported a profit of $25 million, down 36% from the year-ago period’s level, primarily due to the adverse net impact of tariffs.
Other
This segment includes three operating segments — at-Home Solutions, Nuclear and Precision Health Solutions, and OptiFreight Logistics. Sales totaled $1.71 billion, up 31% year over year.
The segment’s profit amounted to $179 million, up 34% from the year-ago level. This upside was driven by robust performance across the three operating segments.
Margin Analysis
Gross profit increased 17.7% year over year to $2.5 billion.
As a percentage of revenues, the gross margin in the reported quarter was 4.1%, up almost 20 basis points year over year.
Distribution, selling, general and administrative expenses totaled $1.54 billion, up 17.3% year over year.
Operating income amounted to $509 million, down 30.3% year over year. Adjusted operating income increased 18.5% year over year to $956 million.
Financial Update
The company exited the reported quarter with cash and cash equivalents of $3.94 billion compared with $2.78 billion in the fiscal second quarter.
Net cash provided by operating activities totaled $3.48 billion compared with $877 million in the year-ago period.
2026 View Raised
Cardinal Health raised its fiscal 2026 earnings guidance. The company anticipates adjusted EPS to be between $10.70 and $10.80 (30-31% growth), up from the previous outlook of $10.15 to $10.35. The Zacks Consensus Estimate for the same is pegged at $10.32.
The company continues to expect revenues from its Pharmaceutical segment to grow 15-17% year over year. Segmental profit is likely to increase 22-23%, up from the previous guidance of 20-22%.
Revenues from the Medical segment are estimated to grow 1-3%. Segmental profit is expected to be approximately $150 million.
Revenues from the Other segment are likely to grow 26-28%. Segmental profit is now expected to increase 36-38% compared with the previous guidance of 33-35%.
Conclusion
Cardinal Health delivered mixed third-quarter fiscal 2026 results, wherein earnings beat estimates while revenues missed the same. Quarterly performance was driven by operating growth within Pharmaceutical and Specialty Solutions, which benefited from resilient demand and continued expansion in specialty distribution. The company’s growth businesses also contributed significantly, reflecting ongoing momentum in at-Home Solutions, Nuclear and Precision Health Solutions and physician support platforms, while Global Medical Products and Distribution showed steady improvement in better volumes and execution initiatives.
Shares of CAH were up 0.4% in pre-market trading. The company’s shares have lost 1.3% in the year-to-date period compared with the industry’s 6.1% decline. The S&P 500 Index has gained 4.5% in the same timeframe.
Image Source: Zacks Investment Research
Cardinal Health continues to expand its capabilities in specialty care and physician enablement. The recent acquisition of Solaris Health significantly strengthens its presence in the urology space, adding more than 750 providers across 250 locations in 14 states. This move enhances The Specialty Alliance’s multi-specialty platform, which now reaches approximately 3,000 providers across 33 states. In addition, the collaboration between Specialty Networks and The Specialty Alliance to support real-world clinical studies highlights the company’s growing role in data-driven healthcare solutions.
The company is investing in innovation, including the expansion of Actinium-225 production capabilities at the Nuclear and Precision Health Solutions Center for Theranostics Advancement, positioning it to support the development of next-generation targeted therapies. At the same time, Cardinal Health maintains a disciplined capital allocation strategy, having reduced debt and achieved its leverage target range ahead of schedule, while returning significant capital to shareholders through $1.0 billion in share repurchases year to date and dividend payments.
With sustained strength in its core segments, continued expansion in specialty platforms and a raised fiscal 2026 outlook, Cardinal Health remains well-positioned for continued growth and long-term value creation.
CAH’s Zacks Rank and Other Key Picks
Cardinal Health carries a Zacks Rank #2 (Buy) at present.
Some other top-ranked stocks in the broader medical space are Globus Medical (GMED - Free Report) , Phibro Animal Health (PAHC - Free Report) and Encompass Health (EHC - Free Report) . While GMED sports a Zacks Rank #1 (Strong Buy) at present, PAHC and EHC carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Globus Medical’s shares have gained 1.4% in the year-to-date period. Estimates for the company’s first-quarter 2026 EPS have increased 1 cent to 92 cents in the past 30 days. GMED’s earnings beat estimates in three of the trailing four quarters and missed once, delivering an average surprise of 18.79%. In the last reported quarter, it posted an earnings surprise of 20.75%.
Estimates for Phibro Animal Health’s third-quarter fiscal 2026 EPS have remained constant at 72 cents in the past 30 days. Shares of the company have risen 41.1% in the year-to-date period. PAHC’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 20.15%. In the last reported quarter, it delivered an earnings surprise of 26.09%.
Encompass Health’s shares have lost 3.3% in the year-to-date period. Estimates for the company’s first-quarter 2026 EPS have remained constant at $1.51 in the past 30 days. EHC’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 12.09%. In the last reported quarter, it posted an earnings surprise of 13.18%.