Luis Alvarez/DigitalVision via Getty Images I am updating my previous analysis on Cardinal Health (NYSE:CAH) in light of Q4 and Full-Year 2024 earnings, which were released pre-market on Wednesday, August 14th. I previously rated Cardinal Health a buy for the following reasons: Q3 earnings were strong with the company raising full-year guidance The OptumRx loss was a short-term blip with no change to the long-term investment thesis The specialty pharmaceutical business had the potential to drive even m ...

Cardinal Health Inc. CAH is a global pharmaceutical and medical products distributor serving over 100,000 hospitals. It's also the largest distributor of medical supplies and surgical products in the United States. Cardinal Health provides medical supplies and specialty therapeutics to 90% of the hospitals in the United States, as well as 60,000 pharmacies and over 10,000 specialty physician offices. The rising trend in acute care utilization from emergency rooms, ambulatory and surgical care centers, and i ...

Cardinal Health, Inc. (CAH) recently announced plans to open a new state-of-the-art distribution center in Walton Hills, OH, to support its medical products and distribution business in the United States.The 249,000-square-foot facility will be more than 30% larger than its predecessor in Solon, OH and is expected to be fully operational by spring of 2025. This new center will integrate cutting-edge technology and automation, enhancing efficiency, storage capacity and the overall quality of service.Signific ...

New facility opening in Walton Hills demonstrates ongoing commitment to increase U.S. warehouse capacity and modernize operations  DUBLIN, Ohio, Aug. 21, 2024 /PRNewswire/ -- Cardinal Health (NYSE: CAH) announced today its plans to open a new distribution center in Walton Hills, Ohio, supporting its U.S. Medical Products and Distribution business. The facility will integrate new technology solutions, deliver operational efficiencies, and provide expanded capacity in the Cleveland, Ohio area. With constructi ...

ab 14 August 2024 Global Research and Evidence Lab Cardinal Health Inc Wrap: Positive Financial and Strategic Updates To Start FY25; Upping PT to $125 (from $120) UBS View: Near-Term Optics Challenged By Optum Fallout But Don't Lose Sight of Big Picture The most important takeaways from the F4Q print are (1) manageable fallout from the Optum loss, (2) the underappreciated earnings power of new contract wins and existing business expansion, and (3) solid cash flow generation that provides relative operationa ...

Global Research and Evidence Lab 14 August 2024 Cardinal Health Inc. Caliendo's Conference Call Commentary ● General Takeaways: Management provided additional color underlying the improved FY25 Pharma EBIT outlook and steady FY25 GMPD EBIT guidance. Within Pharma, guidance calls for y/y EBIT improvement of +1-3% with consistent generic market dynamics, a greater contribution from brand/specialty products, a modest y/y headwind from COVID vaccine, and cost optimization. On GMPD, CAH did not seem overly conce ...

First Read Cardinal Health Inc First Take: Improved FY25 Guidance and LT Commitment to GMPD Conveyed Loaded Print: Improved FY25 Guide, Steady GMPD Outlook and More Aggressive Repos Should Buoy Sentiment Along with F4Q results, CAH tweaked preliminary FY25 financial expectations offered last quarter. Key guidance highlights include: (1) FY25 EPS range of $7.55-7.70 (prior: at least $7.50) on better Pharma EBIT growth of +1-3% ( prior: at least 1% - at midpoint adds ~$0.06); (2) lower interest and other (at ...

Financial Data and Key Metrics Changes - Cardinal Health reported a 29% growth in EPS for both Q4 and fiscal year 2024, with full-year EPS reaching $7.53, exceeding guidance by $0.96 [7][25] - The company generated nearly $4 billion in adjusted free cash flow for the year, ending with approximately $5 billion in cash after returning $1.25 billion to shareholders [7][25] - Revenue for fiscal year 2024 increased by 11% to $227 billion, with gross margin growing by 8% to $7.4 billion [24][25] Business Line Data and Key Metrics Changes - The pharmaceutical and specialty solutions segment saw a 13% revenue increase in Q4 to $55.6 billion, driven by brand and specialty pharmaceutical sales [20] - The GMPD segment's Q4 revenue grew by 2% to $3.1 billion, with segment profit of $47 million, reflecting ongoing improvement efforts [22] - Revenue from other businesses, including at-home solutions and OptiFreight, increased by 15% to $1.2 billion, with segment profit growing by 11% to $111 million [23] Market Data and Key Metrics Changes - The specialty business revenue grew by 14% for the year, now exceeding $36 billion, with expectations for continued growth despite a large contract expiration [9][10] - The generics program within the pharmaceutical segment showed strong performance, contributing to overall revenue growth [21] Company Strategy and Development Direction - Cardinal Health is focused on enhancing its pharmaceutical and specialty solutions, executing a GMPD improvement plan, and optimizing its portfolio for shareholder value creation [8][12] - The company is investing in key growth areas, including specialty networks and at-home solutions, while simplifying its business structure for better performance [9][12][45] - The strategic partnership with CVS Health for sourcing biosimilars aims to increase access to therapy options at lower costs [38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience and growth potential, supported by positive industry trends and strategic initiatives [11][34] - The company anticipates a decline in pharma revenue for fiscal year 2025 due to a large customer contract expiration but expects underlying growth from new customers and existing customer expansions [28][29] - Management highlighted the successful execution of cost control measures and inflation mitigation strategies, which are expected to provide a tailwind in the upcoming fiscal year [22][44] Other Important Information - Cardinal Health raised its share repurchase expectations for fiscal year 2025 to $750 million, reflecting a commitment to returning capital to shareholders [15][34] - The company identified a longstanding accounting error that resulted in slight net increases to non-GAAP EPS for prior periods [17] Q&A Session Summary Question: Insights on margin improvement for fiscal year 2025 - Management raised guidance for pharma business profitability, reflecting confidence in new customer contributions and cost mitigation efforts [51][52] Question: Impact of macro freight trends and input costs - Management noted that while there have been increases in freight costs, they are manageable and not at levels that require widespread price adjustments [56][57] Question: Underlying pharma growth and profit streams - Specialty is expected to continue growing, driven by investments and new customer acquisitions, despite the impact of a contract non-renewal [62][63] Question: Changes in guidance regarding Optum unwind - Management confirmed that the non-renewal will impact Q1, but cost optimization and new customer onboarding are already in play to mitigate effects [70][71] Question: Gross profit performance and insulin pricing changes - Management indicated that gross margin progression met expectations, with ongoing benefits from GLP-1 growth and some offsets from insulin pricing changes [74][75]

Key TakeawaysCardinal Health exceeded fourth-quarter earnings and revenue estimates on strong sales of pharmaceuticals.The healthcare firm raised its full-year profit guidance and revenue for its Pharmaceutical and Specialty Solutions unit.Cardinal Health also boosted its share buyback plan. Shares of Cardinal Health (CAH) gained in intraday trading Wednesday as the provider of healthcare services and products posted better-than-anticipated results and raised its outlook on strong drug sales. The company re ...

Core Viewpoint - Cardinal Health, Inc. reported strong fourth-quarter fiscal 2024 results, with adjusted earnings per share (EPS) of $1.84, exceeding estimates and showing a 29% year-over-year improvement [1]. Revenue Details - The company achieved sales of $59.9 billion, reflecting a 12% year-over-year increase and surpassing consensus estimates by 2% [2]. Segmental Analysis - **Pharmaceutical and Specialty Solutions Segment**: Revenues increased by 13% to $55.6 billion, driven by branded pharmaceutical sales growth. Profit in this segment rose 8% to $482 million [3]. - **Global Medical Products and Distribution Segment**: Revenues totaled $3.1 billion, up 2% year over year, with profits increasing to $47 million from $7 million in the prior year [3]. - **Other Segment**: This segment reported sales of $1.2 billion, a 15% increase year over year, with profits rising 11% to $111 million, primarily due to strong performance in OptiFreight Logistics [4]. Margin Analysis - Gross profit increased by 5% year over year to $1.88 billion, with a gross margin of 3.1%, down 20 basis points from the previous year. Operating income rose significantly to $401 million from $111 million in the prior year [5]. Financial Update - The company ended the quarter with cash and cash equivalents of $5.13 billion, up from $3.72 billion in the previous quarter. Cumulative net cash from operating activities was $2.08 billion, compared to $871 million in the year-ago period [6]. 2025 Guidance Update - Cardinal Health raised its fiscal 2025 adjusted EPS guidance to between $7.55 and $7.70, up from at least $7.50. The company anticipates a 4-6% decline in Pharmaceutical segment revenues due to the OptumRx contract expiration, while Medical segment revenues are expected to grow 3-5% [7]. Conclusion - The company exited the fiscal fourth quarter positively, with earnings and revenues exceeding estimates, and experienced year-over-year growth across all sectors. Shares rose 6.2% in pre-market trading following the results [8].