Cardinal Health, Inc. (CAH) is set to release its fourth-quarter fiscal 2024 earnings on August 14th, before the market opens. The company has a history of exceeding earnings expectations, with an average surprise of 12.91% over the last four quarters.
Analysts are anticipating positive results for the upcoming quarter, with the consensus estimate for earnings pegged at $1.72 per share, representing a 10.9% year-over-year increase. Revenue is expected to climb 9.9% to $58.72 billion.
Several factors are likely to contribute to these positive projections. Since the third quarter of fiscal 2024, Cardinal Health has been reporting results under new operating segments: Pharmaceutical and Specialty Solutions, Global Medical Products and Distribution (GMPD), and Nuclear at-Home and OptiFreight.
The Pharmaceutical segment saw significant growth in the third quarter, with revenues reaching approximately $50.7 billion, up 9% year-over-year. This growth was driven by increased branded pharmaceutical sales from existing customers and the effectiveness of the company’s generics program. The rising demand for GLP-1 medications also acted as a tailwind.
The Medical segment experienced a 4% year-over-year increase in revenues, driven by growth in at-Home Solutions and GMPD. The segment’s profitability was bolstered by mitigation initiatives aimed at mitigating inflationary impacts.
Cardinal Health’s recent acquisition of Specialty Networks, finalized in March 2024, is also expected to contribute to positive results. Specialty Networks provides a platform for physician-focused solutions in urology, GI, and rheumatology. The company plans to further invest in this platform in fiscal 2025 and expand its reach to other therapeutic areas, such as oncology.
Furthermore, Cardinal Health’s new distribution center in South Carolina, slated to open in early fiscal 2025, is expected to improve the company’s supply chain and boost revenue.
While the company is anticipated to report strong results, the Zacks model does not predict a significant earnings beat. The Earnings ESP (the difference between the Most Accurate Estimate and the Zacks Consensus Estimate) stands at -0.17%, and Cardinal Health currently carries a Zacks Rank of #3 (Hold).
Investors interested in medical stocks with a higher likelihood of beating earnings expectations should consider Phibro Animal Health (PAHC), Owens & Minor (OMI), and ResMed (RMD). These companies have a positive Earnings ESP and a Zacks Rank of 2 (Buy) or 3 (Hold), indicating a greater potential for earnings surprises.
