Cardinal Health(US:CAH) ZACKS·2025-05-01 15:40Core Viewpoint - Cardinal Health, Inc. reported strong adjusted earnings per share (EPS) for the third quarter of fiscal 2025, beating estimates, while revenues remained flat and slightly missed expectations [1][12]. Financial Performance - Adjusted EPS for Q3 fiscal 2025 was $2.35, exceeding the Zacks Consensus Estimate of $2.15 by 9.3% and improving 12.4% year over year [1]. - GAAP EPS was $2.10, compared to $1.07 in the same quarter last year [1]. - Total revenue was $54.89 billion, flat year over year, but missed the Zacks Consensus Estimate by 0.2% [1]. Segmental Analysis - Pharmaceutical and Specialty Solutions: Revenues decreased 0.4% to $50.4 billion year over year, primarily due to the expiration of a customer contract with OptumRx, although sales grew 20% when excluding this impact [2]. - Pharmaceutical Profit: Totaled $662 million, up 14% from the previous year, driven by growth in brand and specialty products [3]. - Global Medical Products and Distribution: Revenues increased 2% to $3.2 billion, supported by growth from existing customers [3]. - Other Segment: Sales reached $1.3 billion, up 13% year over year, with profits of $134 million, a 22% increase from the prior year [4][5]. Margin Analysis - Gross profit rose 9.7% year over year to $2.12 billion, with a gross margin of 3.9%, expanding nearly 30 basis points [6]. - Operating income was $730 million, up 97.8% year over year, while adjusted operating income increased 21% to $807 million [6]. Financial Update - Cash and cash equivalents at the end of the quarter were $3.33 billion, down from $3.81 billion in the previous quarter [8]. - Net cash provided by operating activities was $2.91 billion, a significant increase from $27 million used in the same period last year [8]. 2025 Guidance Update - Cardinal Health updated its fiscal 2025 earnings guidance, now expecting adjusted EPS between $8.05 and $8.15, up from $7.85-$8.00 [9]. - Pharmaceutical segment revenues are anticipated to decline 4-6%, while segment profit is expected to increase 11.5-12.5% [9]. - Medical segment revenues are projected to grow 3-5%, with profits expected between $130-$140 million [10]. Future Outlook - The company expects double-digit EPS growth for fiscal 2026, driven by strong segment profit growth across various divisions [11]. - Continued strong demand for Pharmaceutical and Specialty Solutions is anticipated, with growth from existing customers offsetting contract expirations [12]. Market Performance - Despite mixed results, Cardinal Health's shares rose 0.5% in pre-market trading, with a year-to-date gain of 19.5% compared to the industry’s 0.9% growth [13].