Cardinal Health Revenue Rises 23% - Update
February 01 2016 - 12:05PM
Dow Jones News
By Austen Hufford
Cardinal Health Inc. on Monday reported 23% revenue growth in
its latest quarter, driven by its pharmaceutical segment, as the
company's top and bottom lines beat analysts' expectations.
Cardinal, a drug wholesaler that also makes gloves and surgical
apparel, is working to expand its portfolio of medical products as
hospitals merge. It provides resources to more than three-quarters
of U.S. hospitals.
The Dublin, Ohio, company completed a $1.94 billion acquisition
of the Cordis heart-product business from Johnson & Johnson in
October, adding stents and catheters to the list of products
Cardinal offers. In July, Cardinal bought Harvard Drug Group for
roughly $1.12 billion, a deal that broadened its offerings of
generic and over-the-counter medications.
In the fiscal second quarter ended Dec. 31, Cardinal Health
reported a profit of $326 million, or 98 cents a share, up from
$289 million, or 86 cents a share, a year earlier. Excluding
acquisition-related costs and other items, per-share earnings rose
to $1.30 from $1.20. Revenue increased 23% to $31.45 billion.
Analysts polled by Thomson Reuters expected per-share profit of
$1.26 and revenue of $29.23 billion.
Cardinal's pharmaceutical segment revenue climbed 25% in the
quarter to $28.29 billion, while medical segment revenue grew 8.5%
to $3.16 billion.
The company reaffirmed its earnings forecast of $5.15 to $5.35 a
share for the fiscal year.
Despite revenue and profit growth, shares of Cardinal Health
declined 1.7% to $80 in morning trading.
David Larsen, a managing director of investment bank Leerink
Partners, said the stock edging lower most likely comes from
worries over a decline in the company's operating margin, which
fell to 1.8% in the quarter from 2.1% a year earlier. But he noted
that while the figure nominally declined, that change was driven by
customer growth and a one-time charge.
"The margins on both divisions looked a little bit pressured.
That's what caused some of the worry," Mr. Larsen said. "The
earnings themselves were actually pretty good."
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
February 01, 2016 11:50 ET (16:50 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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