DUBLIN, Ohio – Cardinal Health (NYSE: NYSE:) shares fell 2.3% following the release of their third-quarter earnings, which surpassed analyst expectations.
The company reported adjusted earnings per share (EPS) of $2.08, outperforming the consensus estimate of $1.96. Despite a 9% increase in revenue to $54.9 billion, the stock experienced a downturn due to a softer preliminary outlook for fiscal year 2025.
The company’s revenue, however, did not match the $56.05 billion reported in the same quarter last year, reflecting a YoY decline. The decrease in stock value is attributed to the company’s preliminary guidance for fiscal year 2025, which is set at a minimum of $7.50 per share, below the analyst consensus of $7.87.
For fiscal year 2024, Cardinal Health raised and narrowed its adjusted EPS guidance to a range of $7.30 to $7.40, from the previous range of $7.20 to $7.35, slightly above the consensus of $7.28. The midpoint of the new guidance range, $7.35, is marginally higher than the analyst consensus.
Jason Hollar, CEO of Cardinal Health, expressed confidence in the company’s performance, stating, “In Q3, we delivered broad-based growth, including solid profit growth in Pharmaceutical and Specialty Solutions, on top of an exceptionally strong quarter from a year ago.” Hollar also noted the acceleration in the Global Medical Products and Distribution segment as a contributing factor to the company’s robust quarterly results.
The company’s updated fiscal year 2024 guidance includes an improved outlook for the Pharmaceutical and Specialty Solutions segment, with expected profit growth of 8.5% to 9.5%, revised from the previous forecast of 7% to 9%. Additionally, Cardinal Health adjusted its expected adjusted effective tax rate for the fiscal year to a range of 22% to 23%, down from the earlier projection of 23% to 24%.
Investors reacted to the mixed signals of the strong third-quarter performance against the backdrop of a cautious outlook for the future, leading to the slight decline in the company’s share price. Despite the current quarter’s achievements, the market’s response reflects sensitivity to long-term expectations.
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