Cardinal Health (NYSE: CAH) reported its first-quarter fiscal year 2025 revenue at $52.3 billion, a 4% decline compared to the same quarter in fiscal year 2024. Excluding the impact of a previously announced large customer contract expiration, revenue increased by 15%. The company reported GAAP operating earnings of $568 million and a GAAP diluted earnings per share (EPS) of $1.70. Non-GAAP operating earnings rose 12% to $625 million, bolstered by significant growth in the Pharmaceutical and Specialty Solutions segment. Non-GAAP diluted EPS increased 9% to $1.88, driven by higher earnings and a reduced share count due to share buybacks.
“We began fiscal 2025 with strong operational and financial results, particularly in the Pharmaceutical and Specialty Solutions segment,” said CEO Jason Hollar. “This performance gives us confidence to raise our fiscal 2025 guidance just a quarter into the year.”
Q1 FY25 Summary
| Metric | Q1 FY25 | Q1 FY24 | Year-over-Year Change |
|---|---|---|---|
| Revenue | $52.3 billion | $54.7 billion | (4)% |
| Operating Earnings | $568 million | $(32 million) | N.M. |
| Non-GAAP Operating Earnings | $625 million | $557 million | 12% |
| Net Earnings | $416 million | $(12 million) | N.M. |
| Non-GAAP Net Earnings | $460 million | $430 million | 7% |
| Effective Tax Rate | 23.0% | 75.1% | |
| Non-GAAP Effective Tax Rate | 23.0% | 20.9% | |
| Diluted EPS | $1.70 | $(0.05) | N.M. |
| Non-GAAP Diluted EPS | $1.88 | $1.72 | 9% |
Segment Results
Pharmaceutical and Specialty Solutions
- Revenue: $48.0 billion (down 5%)
- Segment Profit: $530 million (up 16%)
The decline in revenue was mitigated by a 16% increase when excluding the contract expiration, driven by growth in brand and specialty pharmaceutical sales.
Global Medical Products and Distribution
- Revenue: $3.1 billion (up 3%)
- Segment Profit: $8 million (down from $12 million)
The profit decrease was attributed to higher manufacturing and health costs, although offset by improved inflationary impacts.
Other Segment
- Revenue: $1.2 billion (up 13%)
- Segment Profit: $104 million (up 8%)
Growth across various operating segments, including OptiFreight Logistics, contributed to the increase.
Fiscal Year 2025 Outlook
Cardinal Health raised its fiscal 2025 guidance for non-GAAP diluted EPS to $7.75–$7.90, up from $7.55–$7.70. The company now expects 4% to 6% growth in the Pharmaceutical and Specialty Solutions segment, with adjusted free cash flow projected at $1.0 to $1.5 billion.
Recent Highlights
- Announced an agreement to acquire Integrated Oncology Network (ION) for $1.1 billion, enhancing oncology care capabilities.
- Initiated a $375 million accelerated share repurchase program.
- Planned to open a new distribution center in Walton Hills, Ohio, in spring 2025.
- Ranked 17th on TIME’s World’s Best Companies of 2024 list.
Upcoming Investor Events
- UBS Global Healthcare Conference: November 12, 2024
- Citi Global Healthcare Crossroads Conference: December 3, 2024
- Evercore ISI Healthcare Conference: December 3, 2024
- J.P. Morgan Healthcare Conference: January 13-16, 2025
