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CAH Q1 Earnings & Revenues Beat Estimates on Pharma Strength
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Key Takeaways
Cardinal Health's Q1 FY27 adjusted EPS rose 28% to $3.26, while revenues climbed 5% to $67.51 billion.
Pharmaceutical and Specialty Solutions revenues grew 6%, with segment profit rising 17% to $783 million.
CAH raises its FY27 adjusted EPS outlook to $12.80-$13, implying 17-19% growth.
Cardinal Health, Inc. (CAH - Free Report) reported first-quarter fiscal 2027 adjusted earnings per share (EPS) of $3.26, beating the Zacks Consensus Estimate by 11.6%. The bottom line improved 28% year over year, aided by higher operating earnings, a lower share count and a reduced effective tax rate.
GAAP EPS in the quarter was $2.38 compared with $1.88 in the year-ago period.
CAH Q1 Revenue Details
For the fiscal first quarter, revenues increased 5% year over year to $67.51 billion. The top line surpassed the Zacks Consensus Estimate by 0.8%.
The improvement was primarily driven by brand and specialty pharmaceutical sales growth from existing customers. Growth across the company's higher-margin businesses also supported the top line.
Shares of CAH were up 3.5% in pre-market trading. The company’s shares have climbed 27.4% in the year-to-date period compared with the industry’s 19.6% rise and the S&P 500 Index’s 11.5% increase.
Image Source: Zacks Investment Research
Cardinal Health's Segmental Performance
Pharmaceutical and Specialty Solutions
Revenues in this segment increased 6% year over year to $62.58 billion. The improvement was driven by brand and specialty pharmaceutical sales growth from existing customers.
The segment's profit totaled $783 million, up 17% from the year-ago period's level of $667 million. The upside was primarily driven by contributions from brand and specialty products and positive generics program performance. Segment profit margin expanded 12 basis points to 1.25%.
Global Medical Products and Distribution
Revenues in this segment totaled $3.19 billion, remaining approximately flat year over year. Growth in Cardinal Health Brand was offset by lower distribution revenues.
The segment reported a profit of $33 million, down 28% from $46 million in the year-ago quarter. The decline primarily reflected unfavorable distribution and foreign exchange impacts, partially offset by Cardinal Health Brand growth. Segment profit margin contracted 41 basis points to 1.03%.
Other
This segment includes three operating segments, namely Nuclear and Precision Health Solutions, at-Home Solutions and OptiFreight Logistics. Revenues totaled $1.76 billion, up 7% year over year, driven by growth across all three businesses.
The segment's profit amounted to $193 million, up 16% from $166 million in the year-ago period. Growth across OptiFreight Logistics, Nuclear and Precision Health Solutions and at-Home Solutions supported profitability. Segment profit margin expanded 82 basis points to 10.94%.
CAH Q1 Margin Analysis
Gross profit increased 12% year over year to $2.60 billion. As a percentage of revenues, gross margin was approximately 3.85%, up about 22 basis points year over year.
Distribution, selling, general and administrative expenses totaled $1.60 billion, up 9% year over year.
Operating income amounted to $753 million, up 13% year over year. Adjusted operating income increased 17% to $1 billion.
Cardinal Health's Financial Update
The company exited the reported quarter with cash and cash equivalents of $5.26 billion compared with $4.86 billion at the end of fiscal 2026.
Net cash provided by operating activities totaled $1.40 billion compared with $973 million in the year-ago period.
CAH incurred capital expenditures of $157 million during the quarter. It also returned approximately $625 million to its shareholders, including $500 million in share repurchases and $125 million in dividend payments.
CAH Raises FY27 Earnings Outlook
Cardinal Health raised its fiscal 2027 adjusted EPS guidance to $12.80-$13 from the previous range of $12.40-$12.60. The updated outlook implies growth of 17-19% from the fiscal 2026 adjusted baseline, excluding the IEEPA tariff refund benefit.
The company raised its Pharmaceutical and Specialty Solutions segment profit growth outlook to 10-12% from 8-11%. Revenue growth is still anticipated at 3-5%.
For Global Medical Products and Distribution, revenues are expected to increase 2-4%, while segment profit is projected between $200 million and $220 million.
Revenues from the Other segment are now anticipated to grow 12-14%, compared with the previous expectation of 11-13%. Segment profit growth guidance was raised to 17-20% from 15-18%.
Cardinal Health, Inc. Price, Consensus and EPS Surprise
Cardinal Health delivered strong first-quarter fiscal 2027 results, with both earnings and revenues surpassing the Zacks Consensus Estimate. Performance benefited from strength in Pharmaceutical and Specialty Solutions, supported by brand and specialty pharmaceutical sales growth and positive generics program performance. The company's higher-margin businesses also continued to expand across at-Home Solutions, Nuclear and Precision Health Solutions and OptiFreight Logistics.
Cardinal Health continues to strengthen its growth platforms through strategic acquisitions and targeted investments. The company completed the acquisition of Strive Medical and expects to close the acquisition of AdaptHealth's Diabetes Health business in the third quarter of fiscal 2027. CAH also remains focused on expanding its specialty capabilities, nuclear infrastructure, supply-chain technology and automation initiatives.
On the commercial front, CAH entered into a binding letter of intent to renew its pharmaceutical distribution agreements with CVS Health, reinforcing its long-standing strategic relationship. The company is also investing in new distribution centers and advanced automation technologies to enhance operational capabilities and support future growth.
CAH’s Zacks Rank & Key Picks
Cardinal Health carries a Zacks Rank #3 (Hold) at present.
Some better-ranked stocks from the broader medical space are Glaukos (GKOS - Free Report) , Intuitive Surgical (ISRG - Free Report) and West Pharmaceutical Services (WST - Free Report) .
Glaukos, currently flaunting a Zacks Rank #1 (Strong Buy), reported third-quarter 2026 adjusted earnings per share (EPS) of 47 cents, which surpassed the Zacks Consensus Estimate by 491.7%. Revenues of $211 million beat the Zacks Consensus Estimate by 25%. You can see the complete list of today’s Zacks #1 Rank stocks here.
GKOS has an estimated earnings growth rate of 155.6% for 2026. The company’s earnings beat estimates in three of the trailing four quarters and missed once, the average surprise being 138.6%.
Intuitive Surgical, currently carrying a Zacks Rank #2 (Buy), reported third-quarter 2026 adjusted EPS of $3.00, which beat the Zacks Consensus Estimate by 13.6%. Revenues of $3.05 billion surpassed the Zacks Consensus Estimate by 4.9%.
Intuitive Surgical has a long-term estimated growth rate of 14.9%. ISRG’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 15.1%.
West Pharmaceutical, currently carrying a Zacks Rank #2, reported a third-quarter 2026 adjusted EPS of $2.66, which surpassed the Zacks Consensus Estimate by 22%. Revenues of $874.5 million beat the Zacks Consensus Estimate by 5.9%.
WST has an estimated long-term earnings growth rate of 17.4%. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 18.6%.
View the Zacks #1 Rank List
Image: Zacks
CAH Q1 Earnings & Revenues Beat Estimates on Pharma Strength
Key Takeaways
Cardinal Health, Inc. (CAH - Free Report) reported first-quarter fiscal 2027 adjusted earnings per share (EPS) of $3.26, beating the Zacks Consensus Estimate by 11.6%. The bottom line improved 28% year over year, aided by higher operating earnings, a lower share count and a reduced effective tax rate.
GAAP EPS in the quarter was $2.38 compared with $1.88 in the year-ago period.
CAH Q1 Revenue Details
For the fiscal first quarter, revenues increased 5% year over year to $67.51 billion. The top line surpassed the Zacks Consensus Estimate by 0.8%.
The improvement was primarily driven by brand and specialty pharmaceutical sales growth from existing customers. Growth across the company's higher-margin businesses also supported the top line.
Shares of CAH were up 3.5% in pre-market trading. The company’s shares have climbed 27.4% in the year-to-date period compared with the industry’s 19.6% rise and the S&P 500 Index’s 11.5% increase.
Image Source: Zacks Investment Research
Cardinal Health's Segmental Performance
Pharmaceutical and Specialty Solutions
Revenues in this segment increased 6% year over year to $62.58 billion. The improvement was driven by brand and specialty pharmaceutical sales growth from existing customers.
The segment's profit totaled $783 million, up 17% from the year-ago period's level of $667 million. The upside was primarily driven by contributions from brand and specialty products and positive generics program performance. Segment profit margin expanded 12 basis points to 1.25%.
Global Medical Products and Distribution
Revenues in this segment totaled $3.19 billion, remaining approximately flat year over year. Growth in Cardinal Health Brand was offset by lower distribution revenues.
The segment reported a profit of $33 million, down 28% from $46 million in the year-ago quarter. The decline primarily reflected unfavorable distribution and foreign exchange impacts, partially offset by Cardinal Health Brand growth. Segment profit margin contracted 41 basis points to 1.03%.
Other
This segment includes three operating segments, namely Nuclear and Precision Health Solutions, at-Home Solutions and OptiFreight Logistics. Revenues totaled $1.76 billion, up 7% year over year, driven by growth across all three businesses.
The segment's profit amounted to $193 million, up 16% from $166 million in the year-ago period. Growth across OptiFreight Logistics, Nuclear and Precision Health Solutions and at-Home Solutions supported profitability. Segment profit margin expanded 82 basis points to 10.94%.
CAH Q1 Margin Analysis
Gross profit increased 12% year over year to $2.60 billion. As a percentage of revenues, gross margin was approximately 3.85%, up about 22 basis points year over year.
Distribution, selling, general and administrative expenses totaled $1.60 billion, up 9% year over year.
Operating income amounted to $753 million, up 13% year over year. Adjusted operating income increased 17% to $1 billion.
Cardinal Health's Financial Update
The company exited the reported quarter with cash and cash equivalents of $5.26 billion compared with $4.86 billion at the end of fiscal 2026.
Net cash provided by operating activities totaled $1.40 billion compared with $973 million in the year-ago period.
CAH incurred capital expenditures of $157 million during the quarter. It also returned approximately $625 million to its shareholders, including $500 million in share repurchases and $125 million in dividend payments.
CAH Raises FY27 Earnings Outlook
Cardinal Health raised its fiscal 2027 adjusted EPS guidance to $12.80-$13 from the previous range of $12.40-$12.60. The updated outlook implies growth of 17-19% from the fiscal 2026 adjusted baseline, excluding the IEEPA tariff refund benefit.
The company raised its Pharmaceutical and Specialty Solutions segment profit growth outlook to 10-12% from 8-11%. Revenue growth is still anticipated at 3-5%.
For Global Medical Products and Distribution, revenues are expected to increase 2-4%, while segment profit is projected between $200 million and $220 million.
Revenues from the Other segment are now anticipated to grow 12-14%, compared with the previous expectation of 11-13%. Segment profit growth guidance was raised to 17-20% from 15-18%.
Cardinal Health, Inc. Price, Consensus and EPS Surprise
Cardinal Health, Inc. price-consensus-eps-surprise-chart | Cardinal Health, Inc. Quote
Wrapping Up
Cardinal Health delivered strong first-quarter fiscal 2027 results, with both earnings and revenues surpassing the Zacks Consensus Estimate. Performance benefited from strength in Pharmaceutical and Specialty Solutions, supported by brand and specialty pharmaceutical sales growth and positive generics program performance. The company's higher-margin businesses also continued to expand across at-Home Solutions, Nuclear and Precision Health Solutions and OptiFreight Logistics.
Cardinal Health continues to strengthen its growth platforms through strategic acquisitions and targeted investments. The company completed the acquisition of Strive Medical and expects to close the acquisition of AdaptHealth's Diabetes Health business in the third quarter of fiscal 2027. CAH also remains focused on expanding its specialty capabilities, nuclear infrastructure, supply-chain technology and automation initiatives.
On the commercial front, CAH entered into a binding letter of intent to renew its pharmaceutical distribution agreements with CVS Health, reinforcing its long-standing strategic relationship. The company is also investing in new distribution centers and advanced automation technologies to enhance operational capabilities and support future growth.
CAH’s Zacks Rank & Key Picks
Cardinal Health carries a Zacks Rank #3 (Hold) at present.
Some better-ranked stocks from the broader medical space are Glaukos (GKOS - Free Report) , Intuitive Surgical (ISRG - Free Report) and West Pharmaceutical Services (WST - Free Report) .
Glaukos, currently flaunting a Zacks Rank #1 (Strong Buy), reported third-quarter 2026 adjusted earnings per share (EPS) of 47 cents, which surpassed the Zacks Consensus Estimate by 491.7%. Revenues of $211 million beat the Zacks Consensus Estimate by 25%. You can see the complete list of today’s Zacks #1 Rank stocks here.
GKOS has an estimated earnings growth rate of 155.6% for 2026. The company’s earnings beat estimates in three of the trailing four quarters and missed once, the average surprise being 138.6%.
Intuitive Surgical, currently carrying a Zacks Rank #2 (Buy), reported third-quarter 2026 adjusted EPS of $3.00, which beat the Zacks Consensus Estimate by 13.6%. Revenues of $3.05 billion surpassed the Zacks Consensus Estimate by 4.9%.
Intuitive Surgical has a long-term estimated growth rate of 14.9%. ISRG’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 15.1%.
West Pharmaceutical, currently carrying a Zacks Rank #2, reported a third-quarter 2026 adjusted EPS of $2.66, which surpassed the Zacks Consensus Estimate by 22%. Revenues of $874.5 million beat the Zacks Consensus Estimate by 5.9%.
WST has an estimated long-term earnings growth rate of 17.4%. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 18.6%.