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Cardinal Health (CAH) Q4 Earnings Beat Estimates, Rise Y/Y

Cardinal Health Inc. CAH reported fourth-quarter fiscal 2017 adjusted earnings of $1.31 per share, which beat the Zacks Consensus Estimate of $1.24 and increased 14.9% on a year-over-year basis.

Revenues increased 5% on a year-over-year basis to almost $33 billion, beating the Zacks Consensus Estimate of $32.8 billion.

Quarter Details

Pharmaceutical Segment: Pharmaceutical revenues rose 5% to $29.6 billion on a year-over-year basis. The segment witnessed strong growth in the Specialty business and also gained a huge number of Pharmaceutical Distribution customers.

However, generic pharmaceutical pricing and the company's recent investments in its Pharmaceutical IT platform led to a 7% drop in segmental profits. However, solid performance by the Red Oak Sourcing platform has partially offset the negative effect.

Medical Segment: Revenues at the segment increased 9% to $3.4 billion primarily on higher contributions from new and existing customers.

Medical segment profits increased 13% to $138 million, courtesy of higher contributions from new and existing customers and solid performance by the post-acute segment. However, unfavorable performances by Cardinal Health Branded products (including Cordis) partially offset sales at the segment.

Other Details: Distribution, selling, general and administrative (SG&A) expenses increased 3% on a year-over-year basis to $377 million in the reported quarter. Cash and equivalents were $6879 million as of Jun 30, 2017.

Cardinal Health, Inc. Price and Consensus

 

Cardinal Health, Inc. Price and Consensus | Cardinal Health, Inc. Quote

FY17 Highlights

For fiscal 2017, Cardinal Health registered adjusted earnings of $5.40 per share, up 3% on a year-over-year basis. Revenues increased 7% on a year-over-year basis to a record $130 billion.

Delving deeper into the segmental revenue details, Pharmaceutical segment (89.6% of net revenues) increased 7% to $116.5 billion in fiscal 2017. Medical segment (10.4% of net revenues) revenues soared 95% on a year-over-year basis to $13.5 billion.

Guidance

The company issued fiscal 2018 guidance for adjusted earnings per share from continuing operations of $4.85–$5.10. Furthermore, Cardinal Health is expected to register fiscal 2019 adjusted earnings per share of at least $5.60.

Key Picks

A few better-ranked stocks in the broader medical sector are Edwards Lifesciences Corporation EW, Abiomed Inc. ABMD and Fresenius Medical Care Corporation FMS.

Notably, Fresenius Medical Care and Edwards Lifesciences sport a Zacks Rank #1 (Strong Buy), while Abiomed has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Fresenius Medical Care represents a return of 2.5% over the last one year. The company delivered a solid earnings surprise of 20.5% in the last reported quarter.

Edwards Lifesciences has a long-term expected earnings growth rate of 15.2%. Notably, the stock has a one-year return of 1.5%.

Abiomed yielded a strong return of 23.4% over the last one year. The stock has a long-term expected earnings growth rate of 30.5%.

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Fresenius Medical Care Corporation (FMS): Free Stock Analysis Report
 
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Edwards Lifesciences Corporation (EW): Free Stock Analysis Report
 
Cardinal Health, Inc. (CAH): Free Stock Analysis Report
 
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