Shares of Cardinal Health, Inc. surged over 7% in pre-market trading on the NYSE following the company’s upward revision of its fiscal 2024 adjusted earnings forecast. This positive outlook comes on the heels of a fourth-quarter profit, a significant improvement from the loss reported in the same quarter last year. The company’s enhanced financial results stemmed from robust revenue growth across both of its segments.
Moreover, Cardinal Health announced an increase in its share repurchase program for fiscal year 2025 by $250 million, bringing the total to $750 million.
CEO Jason Hollar remarked, "Fiscal 2024 was a year of strong operational execution and record financial results, delivered alongside key strategic advancements in our portfolio. We saw robust cash flow generation, sustained profit growth in the Pharmaceutical and Specialty Solutions segment, and significant improvements driven by our GMPD Improvement Plan. We are entering the new fiscal year with momentum and confidence, as evidenced by our upwardly revised fiscal year 2025 guidance."
Looking ahead to fiscal year 2026, Cardinal Health is aiming for at least $500 million in near-term value creation from Global Medical Products and Distribution (GMPD) through further simplification measures and working capital improvements.
For fiscal 2025, the company now expects adjusted earnings per share (EPS) to range from $7.55 to $7.70, up from the previously anticipated minimum of $7.50. In fiscal 2024, adjusted EPS stood at $7.53.
Analysts, based on data compiled by Thomson Reuters, on average anticipate the company to report earnings of $7.53 per share. Analyst estimates generally exclude one-time items.
The company has also updated its profit growth forecast for the Pharmaceutical and Specialty Solutions segment to a range of 1% to 3%, up from at least 1% initially expected. However, the segment is projected to see a revenue decline of 4% to 6%.
For the GMPD segment, revenue is expected to grow between 3% and 5%, with segment profit anticipated to be approximately $175 million.
In the fourth quarter, Cardinal Health reported net earnings of $235 million, a sharp contrast to the $56 million loss recorded the previous year. Earnings per share reached $0.96, whereas the prior year had seen a loss of $0.22 per share.
Adjusted net earnings were $450 million or $1.84 per share, an improvement from the $367 million or $1.43 per share reported a year earlier. Analysts had expected earnings of $1.73 per share for the quarter.
Adjusted operating earnings rose by 14% year-over-year to $605 million, primarily driven by significant profit increases in the GMPD segment and an 8% rise in the Pharmaceutical and Specialty Solutions segment, buoyed by positive performance in the generics program.
Cardinal Health’s fourth-quarter revenues climbed 12% to $59.9 billion, up from $53.4 billion in the prior year. Analysts had projected revenues of $58.64 billion for the quarter.
Revenues for the Pharmaceutical and Specialty Solutions segment grew by 13% year-over-year to $55.6 billion, driven by growth in brand and specialty pharmaceutical sales from existing customers.
The GMPD segment’s fourth-quarter revenue increased by 2% to $3.1 billion, fueled by volume growth from existing customers.
In pre-market trading on the NYSE, Cardinal Health’s shares were up approximately 7.1%, trading at $109.86.
