Cardinal Health Beats Profit Expectations But Cuts Outlook

Cardinal Health Inc. reported fiscal first-quarter earnings that fell to $309 million, or 96 cents a share, from $383 million, or $1.15 a share, in the same period a year ago. Excluding non-recurring items, adjusted earnings per share came to $1.24, above the FactSet consensus of $1.21. Revenue increased 14% to $32.0 billion from $28.1 billion, above the FactSet consensus of $31.1 billion. Pharmaceutical revenue of $28.8 billion beat the FactSet consensus of $28.1 billion, and medical revenue of $3.3 billion topped expectations of $3.2 billion. Based on first-quarter results and current second-quarter expectations, the health care services company cut its adjusted EPS outlook to $5.40 to $5.60 from $5.48 to $5.73. Pharmaceutical revenue is expected to decline in the mid-to-high single-digit percentage range from a year ago, while the FactSet consensus implies growth of 7.5%. "While short-term headwinds, particularly around pharmaceuticals, are quite challenging, our Medical segment had an excellent quarter building on the momentum coming out of fiscal year 2016," said Chief Executive George Barrett. The stock, which was still inactive in premarket trade, has tumbled 24% year to date, while the SPDR Health Care Select Sector ETF has lost 5.9% and the S&P 500 has gained 4%.