Cardinal Health Posts Solid Q1 2025 Results, Raises Fiscal Year Outlook
Cardinal Health, a prominent distributor of pharmaceuticals and medical products, announced its first-quarter fiscal year 2025 earnings, showcasing strong operational and financial performance. The company exceeded expectations, driven by a particularly strong performance in its Pharmaceutical and Specialty Solutions segment. This positive performance allowed Cardinal Health to revise its fiscal year outlook upwards, reflecting a confident outlook for the remainder of the year.
Key Highlights from Q1 FY25
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Revenue:
Cardinal Health reported revenue of $52.3 billion for the first quarter, representing a decrease of 4% compared to the same period in the previous year. However, when excluding the impact of the previously communicated large customer contract expiration, revenue climbed by an impressive 15%.*
Earnings:
The company recorded GAAP operating earnings of $568 million and GAAP diluted earnings per share (EPS) of $1.70. Non-GAAP operating earnings grew by 12% to $625 million, fueled by significant growth in Pharmaceutical and Specialty Solutions segment profit. Non-GAAP diluted EPS also increased by 9% to $1.88, reflecting the rise in non-GAAP operating earnings and a reduced share count following share repurchase activity, partially offset by a higher non-GAAP effective tax rate.*
Segment Performance:
The Pharmaceutical and Specialty Solutions segment continued to shine, showcasing its strength and resilience. This segment experienced a 5% decrease in revenue to $48.0 billion, but a robust 16% increase when excluding the impact of the customer contract expiration. This growth was driven by brand and specialty pharmaceutical sales growth from existing customers. Segment profit for this division surged by 16% to $530 million, largely due to higher contributions from brand and specialty products, including the early launch of COVID-19 vaccine distribution, and a strong performance in generics programs. The Global Medical Products and Distribution segment witnessed a 3% revenue increase to $3.1 billion, driven by volume growth from existing customers. However, segment profit declined to $8 million due to higher manufacturing and health and welfare costs, partially offset by improvements in net inflationary impacts and growth from existing customers. Revenue for the ‘Other’ segment, encompassing at-Home Solutions, Nuclear and Precision Health Solutions and OptiFreight Logistics, climbed by 13% to $1.2 billion. Segment profit for this division also increased by 8% to $104 million, driven by the performance of OptiFreight Logistics.*
Fiscal Year 2025 Outlook:
Reflecting the positive Q1 performance, Cardinal Health raised its fiscal year 2025 guidance range for non-GAAP diluted earnings per share attributable to Cardinal Health, Inc. to $7.75 to $7.90, from $7.55 to $7.70. This upward revision is supported by an updated outlook for the Pharmaceutical and Specialty Solutions segment profit, which is now projected to grow by 4% to 6%, compared to the previous estimate of 1% to 3% growth. The company also adjusted its Global Medical Products and Distribution segment profit outlook to $140 million to $175 million, down from approximately $175 million, primarily due to the impact of higher health and welfare costs. Additionally, the company revised its adjusted free cash flow expectations to $1.0 billion to $1.5 billion, up from approximately $1.0 billion.Recent Notable Activities
* Cardinal Health announced the acquisition of Integrated Oncology Network (ION) for $1.1 billion in cash, aimed at accelerating the development of its Navista oncology alliance. This move will provide additional capabilities supporting independent community practices and add over 100 providers delivering comprehensive oncology and urology care across 10 states.
* The company initiated a $375 million accelerated share repurchase program in the first quarter, which was completed in October.
* Cardinal Health announced plans to open a new, modernized distribution center in Walton Hills, Ohio, supporting its Global Medical Products and Distribution business, in spring 2025.
* Cardinal Health was recognized as the 17th best company in the world in 2024 by TIME magazine.
Investor Events:
Cardinal Health has several upcoming investor events scheduled:
* UBS Global Healthcare Conference on November 12, 2024
* Citi Global Healthcare Crossroads Conference on December 3, 2024
* Evercore ISI Healthcare Conference on December 3, 2024
* J.P. Morgan Healthcare Conference on January 13-16, 2025
Webcast Information:
Cardinal Health will host a webcast today at 8:30 a.m. EDT to discuss the first-quarter results. To access the webcast and presentation slides, visit the Investor Relations page at ir.cardinalhealth.com. The presentation slides and a webcast replay will be available on the Investor Relations page for 12 months.
About Cardinal Health
Cardinal Health is a globally recognized leader in the healthcare industry. The company operates as a distributor of pharmaceuticals and specialty products, a manufacturer and distributor of medical and laboratory products, a supplier of home-health and direct-to-patient products and services, and a provider of performance and data solutions. Cardinal Health is committed to delivering innovative solutions that improve people’s lives every day.
Contact Information:
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Media:
Erich Timmerman, Erich.Timmerman@cardinalhealth.com, 614.757.8231*
