Latest news with #GMPD
Yahoo
15-05-2025
- Business
- Yahoo
CAH Q1 Earnings Call: Cardinal Health Misses Revenue Targets but Exceeds Profit Expectations Amid Tariff Headwinds
Healthcare distributor and services company Cardinal Health (NYSE:CAH) fell short of the market's revenue expectations in Q1 CY2025, with sales flat year on year at $54.88 billion. Its non-GAAP profit of $2.35 per share was 9.4% above analysts' consensus estimates. Is now the time to buy CAH? Find out in our full research report (it's free). Revenue: $54.88 billion vs analyst estimates of $55.46 billion (flat year on year, 1% miss) Adjusted EPS: $2.35 vs analyst estimates of $2.15 (9.4% beat) Adjusted EBITDA: $849 million vs analyst estimates of $876.8 million (1.5% margin, 3.2% miss) Adjusted EPS guidance for the full year is $8.10 at the midpoint, beating analyst estimates by 1.7% Operating Margin: 1.3%, in line with the same quarter last year Free Cash Flow was $2.79 billion, up from -$161 million in the same quarter last year Market Capitalization: $35.42 billion Cardinal Health's Q1 results reflected a business in transition, as revenue came in just below Wall Street expectations while non-GAAP profit surpassed analyst forecasts. Management pointed to continued growth across its Pharmaceutical and Specialty Solutions segment, contributions from recent acquisitions, and operational improvements in its Global Medical Products and Distribution (GMPD) business as key performance drivers. The company also highlighted progress in onboarding new customers and expanding higher-margin services, which offset some external headwinds. Looking ahead, Cardinal Health raised its non-GAAP EPS guidance for the year, citing strong demand for specialty pharmaceuticals, growth in at-Home Solutions, and early benefits from the integration of Advanced Diabetes Supply Group. Management noted ongoing cost control efforts and investments in U.S. manufacturing and automation, but remained cautious about tariff-related risks and the impact of regulatory changes. CEO Jason Hollar emphasized that, 'the largest and highest growth parts of our business are resilient and well positioned to continue growth,' while acknowledging the company's focus on mitigating the financial impact of tariffs in GMPD. Management attributed the quarter's performance to resilient pharmaceutical demand, effective cost control, and growth in targeted business areas. The company's ability to manage through supply chain challenges and tariffs, while integrating new acquisitions, was a recurring theme. Specialty segment momentum: Growth in specialty pharmaceuticals and new customer onboarding, including the successful addition of Publix, drove segment profit. Specialty now represents a growing portion of the overall business mix, aided by acquisitions of GI Alliance and Integrated Oncology Network. GMPD turnaround progress: The GMPD segment saw improved profitability from operational efficiencies and cost reduction initiatives, with Cardinal Health branded products showing above-average growth compared to national brands. Tariff mitigation strategies: Management discussed aggressive steps to reduce tariff exposure, including expanding U.S. manufacturing, diversifying supply chains, leveraging tariff exemptions (such as the Nairobi protocol), and using artificial intelligence for compliance and planning. Most tariff costs in GMPD are expected to be addressed through operational actions and selective price adjustments. Integration of acquisitions: The company reported early positive contributions from GI Alliance, Integrated Oncology Network, and the Advanced Diabetes Supply Group, particularly in expanding higher-margin revenue streams and specialty care capabilities. Growth in high-margin segments: Other growth businesses, including At-Home Solutions, Nuclear, and OptiFreight, delivered double-digit profit growth. Management highlighted secular trends such as increased outpatient care and the demand for nuclear medicine as supportive of future performance. Cardinal Health's management anticipates continued earnings growth driven by demand for specialty pharmaceuticals, ongoing cost discipline, and successful integration of recent acquisitions, but flagged tariffs and regulatory actions as areas of uncertainty. Specialty and biologics expansion: The company expects further growth in specialty pharmaceutical distribution, including both upstream (manufacturer partnerships) and downstream (services to physician practices) businesses, bolstered by recent acquisitions. Tariff exposure and mitigation: While most business lines are not significantly impacted by tariffs, GMPD remains exposed. Management aims to offset the majority of gross tariff costs through cost-cutting and price adjustments, but some uncertainty remains regarding regulatory changes and the final financial burden. Operational investments: Strategic investments in automation, technology, and U.S.-based manufacturing are intended to improve efficiency and support long-term growth, while integration of new businesses (such as Advanced Diabetes Supply Group) is expected to enhance profitability and expand the service portfolio. Lisa Gill (JPMorgan): Asked about sustainability of specialty and branded sales growth; management pointed to broad-based demand and consistent growth across product lines, noting that recent customer wins are expected to support ongoing momentum. Allen Lutz (Bank of America): Questioned whether tariffs or macroeconomic weakness were affecting prescription volumes; CEO Jason Hollar replied that pharmaceutical demand remains resilient even during broader economic downturns, citing historical trends. Joanna Dynak (Evercore ISI): Requested details on Cardinal Health branded GMPD revenue and tariff recovery; management declined to share profit mix specifics but noted strong branded product growth and ongoing use of tariff exemptions. Eric Percher (Nephron): Sought clarification on how much of the $200–$300 million in GMPD tariff costs could be offset by pricing; management expects the majority to be addressed through price increases, especially on Cardinal Health branded products. Daniel Grosslight (Citi): Asked about the practical ability to pass on price increases given customer contracts; management said most price adjustments would follow operational mitigation, and efforts would focus on collaboration with customers to avoid supply disruptions. Looking ahead, the StockStory team will monitor (1) Cardinal Health's ability to sustain specialty pharmaceutical growth and integrate new customer wins, (2) the effectiveness of tariff mitigation strategies within GMPD, and (3) progress in expanding higher-margin businesses such as At-Home Solutions and Nuclear. Updates at the upcoming Investor Day and further color on regulatory or tariff actions will also be important indicators of future performance. Cardinal Health currently trades at a forward P/E ratio of 17×. Is the company at an inflection point that warrants a buy or sell? See for yourself in our free research report. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
Yahoo
02-05-2025
- Business
- Yahoo
Cardinal Health Lifts FY25 EPS Outlook, Sees Growth Despite Tariff Risks
Cardinal Health Inc. (NYSE:CAH) on Thursday reported third-quarter 2025 adjusted EPS of $2.35, up 13% year over year, beating the consensus of $2.17. Sales remained flat at $54.9 billion, missing the consensus of $55.35 billion. Adjusted operating earnings increased 21% to $807 million. Third-quarter sales for the Pharmaceutical and Specialty Solutions segment remained unchanged at $50.6 billion. Third-quarter revenue increased by 20%, excluding the impact of the customer contract expiration, driven by brand and specialty pharmaceutical sales growth from existing and new customers. Segment profit increased 14% to $662 million in the third quarter, driven by contributions from brand and specialty products, MSO platforms (including GI Alliance), BioPharma Solutions (including Specialty Networks), and positive generics program performance, partially offset by the customer contract expiration. Also Read: Revenue for the Global Medical Products and Distribution segment increased 2% to $3.2 billion, driven by volume growth from existing customers. Segment profit increased 77% to $39 million in the third quarter, driven by the beneficial net impact of cost optimization initiatives. GMPD segment manufactures, sources, and distributes Cardinal Health brand medical, surgical, and laboratory products, as well as distributes medical, surgical and laboratory products known as national brand products Outlook: Cardinal Health raises fiscal year 2025 adjusted EPS from $7.85-$8.00 to $8.05-$8.15 compared to consensus of $7.96. Increased outlook for Pharmaceutical and Specialty Solutions segment profit to 11.5% to 12.5% growth, from 10% to 12% growth previously. Narrowed outlook for GMPD segment profit to $130 million to $140 million, from $130 million to $150 million previously. Despite the evolving macro environment conditions, Cardinal Health anticipates double-digit non-GAAP EPS growth in fiscal 2026. The company expects strong segment profit growth in Pharmaceutical and Specialty Solutions. In the face of the macro uncertainty, the company is updating its expectations for fiscal 2026 GMPD segment profit, which it now expects to be at least consistent with fiscal 2025 segment profit. The company will continue to assess opportunities and risks and plan to discuss its fiscal 2026 and beyond expectations at its upcoming Investor Day on June 12. Price Action: CAH stock is trading 2.30% higher at $144.53 at the last check Thursday. Read Next:Photo by deemerwha studio via Shutterstock UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? CARDINAL HEALTH (CAH): Free Stock Analysis Report This article Cardinal Health Lifts FY25 EPS Outlook, Sees Growth Despite Tariff Risks originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved.
Yahoo
30-01-2025
- Business
- Yahoo
Cardinal Health to Report Q2 Earnings: What's in Store for the Stock?
Cardinal Health, Inc. CAH is scheduled to report fiscal second-quarter 2025 results on Jan. 30, before the opening bell. In the last reported quarter, the company delivered an earnings surprise of 14.63%. CAH's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 11.24%.For the fiscal second quarter, the Zacks Consensus Estimate for earnings is pegged at $1.74 per share, indicating a decline of 4.4% from the prior-year quarter's reported figure. The same for revenues is pegged at $54.97 billion, implying a decline of 4.3% year over year. From the fiscal third quarter of 2024, Cardinal Health started reporting its results under new operating segments — Pharmaceutical and Specialty solutions, Global Medical Products and Distribution (GMPD) segment, nuclear at-home and OptiFreight. During the first quarter of fiscal 2025, Pharmaceutical revenues decreased 5% year over year to $48 billion, primarily due to the contract expiration with OptumRx in June 2024. Excluding this impact, sales rose 16% year over year, driven by growth in branded and specialty pharmaceutical sales from existing customers. The segment's profit grew 16% year over year to $530 million, fueled by higher contributions from brand and specialty products, the early seasonal launch of COVID-19 vaccine distribution, and strong generics program performance. This trend is likely to have continued in the to-be-reported quarter as well. Specialty Networks has been a significant driver of Cardinal Health's success in the Pharma segment. These networks contributed strongly to the segment's 16% profit growth during the fiscal first quarter. They enable efficient integration and provide community oncologists with enhanced clinical and economic tools, improving patient care and driving practice performance. In the first quarter of fiscal 2025, revenues in the GMPD segment totaled $3.1 billion, up 3% year over year. The uptick is driven by growth volume from existing customers. The segment reported a profit of $8 million compared with $12 million in the year-ago quarter, due to higher manufacturing and health and welfare costs. Per the fiscal first-quarter earnings call, the GMPD segment's profit is expected to improve each quarter, with stronger results in the second half of the year due to ongoing business improvements and seasonality. However, the segment is likely to still face pressure from higher manufacturing costs and lingering health and welfare expenses in the fiscal second quarter compared to the fiscal first quarter. In November 2024, CAH announced two strategic acquisitions to enhance its specialty and at-home care services. The company will acquire a majority stake in GI Alliance for approximately $2.8 billion in cash. This move aims to accelerate Cardinal Health's multi-specialty growth strategy by expanding its presence in gastroenterology care. Additionally, Cardinal Health will acquire the Advanced Diabetes Supply Group ('ADSG'), a leading direct-to-patient provider of diabetes medical supplies, for about $1.1 billion in cash. ADSG will merge with Cardinal Health's at-Home Solutions business, bolstering its capacity to deliver medical supplies directly to patients' homes. Cardinal Health's recent opening of a 350,000-square-foot warehouse in South Carolina, equipped with the fastest order fulfillment system in the market, along with similar systems in Ohio and a planned Texas facility for 2025, is expected to drive growth and enhance operational efficiency. These new distribution centers are likely to aid the company's supply chain, thus improving revenues. Cardinal Health is likely to provide further updates in this regard in the to-be-reported quarter. Our proven model predicts an earnings beat for Cardinal Health this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is exactly the case here, as you will see below. Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +0.42%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter. Zacks Rank: Cardinal Health currently carries a Zacks Rank #2. Cardinal Health, Inc. price-eps-surprise | Cardinal Health, Inc. Quote Here are a few medical stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle. Globus Medical GMED has an Earnings ESP of +7.37% and a Zacks Rank #3 at present. You can see the complete list of today's Zacks #1 Rank stocks here. The company expects to release its fourth-quarter and full year 2024 results on Feb. 20. Its earnings surpassed estimates in each of the trailing four quarters, the average surprise being 17.65%. The Zacks Consensus Estimate for earnings per share (EPS) indicates an improvement of 26.67% from the year-ago reported figure. Merit Medical Systems MMSI has an Earnings ESP of +3.03% and a Zacks Rank #2 at present. The company is slated to release its fourth-quarter and full year 2024 results on Feb. 25. MMSI's earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6.42%. The Zacks Consensus Estimate for EPS indicates an improvement of 2.47% from the year-ago quarter's figure. Masimo MASI has an Earnings ESP of +4.05% and a Zacks Rank of 2 at present. The company expects to release its fourth-quarter and full year 2024 results on Feb. 25. MASI's earnings surpassed estimates in each of the trailing four quarters, the average surprise being 17.1%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cardinal Health, Inc. (CAH) : Free Stock Analysis Report Masimo Corporation (MASI) : Free Stock Analysis Report Merit Medical Systems, Inc. (MMSI) : Free Stock Analysis Report Globus Medical, Inc. (GMED) : Free Stock Analysis Report To read this article on click here. Zacks Investment Research Sign in to access your portfolio
