Advertisement
Canada markets closed

  • S&P/TSX

    21,873.72
    -138.00 (-0.63%)
     

  • S&P 500

    5,071.63
    +1.08 (+0.02%)
     

  • DOW

    38,460.92
    -42.77 (-0.11%)
     

  • CAD/USD

    0.7296
    -0.0002 (-0.02%)
     

  • CRUDE OIL

    82.79
    -0.02 (-0.02%)
     

  • Bitcoin CAD

    87,917.02
    -2,903.93 (-3.20%)
     

  • CMC Crypto 200

    1,384.87
    -39.23 (-2.75%)
     

  • GOLD FUTURES

    2,329.90
    -8.50 (-0.36%)
     

  • RUSSELL 2000

    1,995.43
    -7.22 (-0.36%)
     

  • 10-Yr Bond

    4.6520
    +0.0540 (+1.17%)
     

  • NASDAQ futures

    17,470.75
    -193.75 (-1.10%)
     

  • VOLATILITY

    15.97
    +0.28 (+1.78%)
     

  • FTSE

    8,040.38
    -4.43 (-0.06%)
     

  • NIKKEI 225

    38,460.08
    +907.92 (+2.42%)
     

  • CAD/EUR

    0.6818
    -0.0001 (-0.01%)
     

Cardinal Health (CAH) Beats on Q1 Earnings, Revenues

Zacks Equity Research

Cardinal Health (CAH) reported first-quarter fiscal 2015 earnings of $1.00 per share, which beat the Zacks Consensus Estimate by 3 cents, but declined 9% on a year-over-year basis.

Cardinal Health, Inc - Earnings Surprise | FindTheBest

Quarter Details

Revenues in the quarter declined 2% to $24.1 billion, well above the Zacks Consensus Estimate of $22.7 billion. Pharmaceutical revenues fell 3% to $21.2 billion while revenues from Medical segment increased 5% to $2.9 million in the quarter.

The year-over-year growth in Pharmaceutical was due to the expiration of the Walgreen Co. (WAG) contract in the year-ago quarter. The decline was partially offset by growth from new and existing customers as well as continued strong growth in China.

Medical revenue was driven by strong performance from acquisitions and the positive net impact of customer volume. During the quarter, the company acquired Emerge Medical, an orthopedic trauma products manufacturer.

Gross margin expanded 40 basis points (bps) on a year-over-year basis to 5.6%.

Distribution, selling, general and administrative (SG&A) expense, as percentage of revenues, increased 20 bps year over year to 3.2% in the quarter.

Adjusted operating margin expanded 20 bps on a year-over-year basis to 2.4% due to higher gross margin base. Pharmaceutical operating profit increased 4%, while that in Medical climbed 6% from the year-ago quarter.

At the end of the first quarter, Cardinal Health had cash and cash equivalents of $2.47 billion. Long-term obligations were $3.16 billion and net debt to capital ratio increased from 15% to 20%. During the first quarter, Cardinal Health bought back $360 million of shares.

The company appointed Michael C. Kaufmann as chief financial officer (CFO) and Jon Giacomin as chief executive officer (CEO) of the Pharmaceutical segment, effective Nov 11, 2014.

Guidance

Cardinal Health expects non-GAAP earnings to range from $4.10 to $4.30 per share in fiscal 2015.

Our Take

We believe that Cardinal Health’s innovative product line will continue to drive top-line growth, going forward. The Red Oak sourcing venture with CVS Health Corp. (CVS) presents a significant growth opportunity, in our view.

Currently, Cardinal Health carries a Zacks Rank #2 (Buy). Another well-placed stock in the sector is The Cooper Companies (COO), which sports a Zacks Rank #1 (Strong Buy).

Read the Full Research Report on CAH
Read the Full Research Report on CVS
Read the Full Research Report on WAG
Read the Full Research Report on COO


Zacks Investment Research