Cardinal Health Inc.'s (CAH) fiscal first-quarter earnings rose
25% as stronger margins and a tax benefit helped offset the impacts
of weaker revenue.
The the drug wholesaler's board also authorized an additional $1
billion in stock repurchases. Chairman and Chief Executive George
Barrett said the three-year buyback program reflected the company's
strong operating cash flow and the strength of our balance sheet.
The new authorization is in addition to the company's existing
stock repurchase plan, which has $350 million remaining.
Cardinal lost its contract with pharmacy-benefits manager
Express Scripts Holding Co. (ESRX) last year to rival
AmerisourceBergen Corp. (ABC). Cardinal was dealt another blow in
March when Walgreen Co. (WAG) and European drug giant Alliance
Boots GmbH agreed to get their branded and generic pharmaceutical
products from AmerisourceBergen.
In the latest quarter, Cardinal's pharmaceutical segment sales
declined 7.2% to $21.8 billion driven by expiration of the Express
Scripts and Walgreen contracts.
Medical segment revenue was up 13% driven by the early 2013
acquisition of medical-supplies provider AssuraMed.
Cardinal Health reported a profit of $339 million, or 99 cents a
share, up from $271 million, or 79 cents a share, a year earlier.
The latest period included a tax benefit of 18 cents. Excluding tax
benefits, acquisition-related charges and other items, adjusted
earnings from continuing operations were up at $1.10 from 81 cents.
Revenue decreased 5.3% to $24.5 billion.
Analysts polled by Thomson Reuters recently expected per-share
earnings of 86 cents and revenue of $22.76 billion.
Gross margin rose to 5.2% from 4.5%.
For the recently started fiscal year, the company narrowed its
per-share earnings estimate to $3.62 to $3.72, from its previous
estimate for per-share profit of $3.45 to $3.60.
Shares closed Wednesday at $55.68 and were inactive in recent
premarket trading.
Write to Tess Stynes at tess.stynes@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires