Cardinal Health Rallies As Strong Start To 2026 Fuels Higher Earnings Guidance

Core Insights - Cardinal Health Inc. reported strong first-quarter 2026 earnings with adjusted earnings of $2.55 per share, exceeding the consensus estimate of $2.18 [1] - Sales increased by 22% year over year to $64.01 billion, surpassing the consensus estimate of $59.19 billion [1] - Adjusted operating earnings rose by 37% to $857 million [1] Segment Performance - Revenue for the Pharmaceutical and Specialty Solutions segment grew by 23% to $59.2 billion, driven by brand and specialty pharmaceutical sales [2] - The Global Medical Products and Distribution segment saw a 2% increase in revenue to $3.2 billion, attributed to volume growth from existing customers [2] Strategic Initiatives - Cardinal Health initiated a $375 million accelerated share repurchase program in the first quarter of fiscal year 2026 [2] - The company raised its fiscal 2026 adjusted earnings per share outlook from $9.30-$9.50 to $9.65-$9.85, above the consensus of $9.43 [4] - The increase in earnings guidance reflects strong first-quarter performance and expected contributions from the Solaris Health acquisition [4] Financial Expectations - The company expects profit growth in the Pharmaceutical and Specialty Solutions segment to be between 16%-19%, up from the prior guidance of 11%-13% [4] - Adjusted free cash flow expectations were raised to $3.0 billion to $3.5 billion, from a previous range of $2.75 billion to $3.25 billion [5] Market Reaction - Following the earnings report, Cardinal Health's stock surged by 16.55%, trading at $191.68 [5]