Cardinal Health Tops Street Expectations

Cardinal Health (CAH) reported better-than-expected results for its fiscal fourth quarter, as the pharmaceutical and medical products supplier said sales in both segments advanced, although it set guidance mostly below the Street’s view.

Fiscal fourth-quarter revenue rose 6% to $37.4 billion, while the consensus on Capital IQ was for $36.7 billion. Earnings per share rose to $1.11 from $1.01 in the same period of fiscal 2018, also ahead of analysts’ expectations for $0.94 a share.

“During fiscal 2019, we delivered on our overall commitments and made significant strides on key initiatives that position us for growth in an evolving healthcare environment,” said Mike Kaufmann, chief executive of the company. “While we still have work to do, we look forward to building on this foundation in the coming year and continuing to enhance the value we provide to our customers and their patients.”

Shares were firming about 1.5% in late morning trading for the company that has a market value of about $12 billion.

Pharmaceutical segment revenue rose 6% to $33.4 billion amid gains in distribution and specialty solutions customers, the company said. Medical segment revenue was up 1% to $4 billion, with growth from existing customers that was partly offset by the sale of naviHealth, a manager of post-acute benefits for health plans.

Cardinal Health said it sees fiscal 2020 earnings between $4.85 and $5.10 a share, while the Street is projecting $5.10 a share. The outlook for the new year includes about $130 million in cost savings from “actions intended to optimize and simplify the company’s operating model and cost structure,” Cardinal Health said.

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