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Why Is Cardinal (CAH) Up 0.9% Since Last Earnings Report?

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It has been about a month since the last earnings report for Cardinal Health (CAH - Free Report) . Shares have added about 0.9% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Cardinal due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Cardinal Health Inc. reported fourth-quarter fiscal 2018 adjusted earnings of $1.01 per share, beating the Zacks Consensus Estimate of 93 cents. Adjusted earnings declined 22.9% year over year.

Revenues increased 7.2% on a year-over-year basis to $35.35 billion and beat the Zacks Consensus Estimate of $34.55 billion.

Segmental Analysis

Pharmaceutical Segment

In the fiscal fourth quarter, pharmaceutical revenues increased 6.4% to $31.46 billion on a year-over-year basis. The segment witnessed strong growth in the Specialty business and gained a large number of Pharmaceutical Distribution customers.

However, the segment witnessed the expiration of a large, mail-order customer contract along with the divestiture of the company's China distribution business.

Pharmaceutical witnessed an 18% decline in profits to $416 million, thanks to generic pharmaceutical pricing.

Medical Segment

In the quarter under review, revenues in the segment improved 14.1% to $3.90 billion, primarily on the acquisition of the Patient Recovery business.

Medical segment profits decreased 17% to $114 million.

Margin Analysis

Gross Profit increased 6.9% year over year to $1.74 billion.

As a percentage of revenues, gross margin remained almost flat on a year-over-year basis to 4.9% of net revenues.

Distribution, selling, general and administrative expenses were $1.27 billion in the quarter under review, up 29.2% year over year.

Guidance

The company has issued guidance for fiscal 2019 adjusted earnings per share.

Adjusted earnings from continuing operations are expected to be $4.90 to $5.15.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

VGM Scores

At this time, Cardinal has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Cardinal has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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