Cardinal Health Targets $12.80–$13.00 In Adjusted Earnings Per Share As Drug Profits Grow
The supplier raised its annual outlook, though medical products and distribution profit fell 28%.
Cardinal Health, which supplies pharmaceuticals and medical products, raised its fiscal 2027 adjusted earnings outlook Thursday to $12.80–$13.00 per share, from $12.40–$12.60. Stronger quarterly results and better expectations for the remaining year prompted the increase, the company said in its earnings release accompanying the SEC filing.
Drug Growth, Medical Weakness
First-quarter revenue rose 5% from a year earlier to $67.5 billion. Adjusted earnings per share reached $3.26, up 28%, with operating growth, fewer shares and a lower tax rate all contributing.
The pharmaceutical and specialty products business delivered $783 million in profit, a 17% increase, on sales of $62.6 billion, up 6%. Existing customers bought more brand-name and specialty drugs, while those products and the generics program helped lift profit.
Medical products and distribution moved the other way: profit fell 28% to $33 million, while revenue stayed roughly flat at $3.2 billion. Distribution weakness and unfavorable currency effects outweighed growth in Cardinal Health Brand products.
The remaining businesses—Nuclear and Precision Health Solutions, at-Home Solutions and OptiFreight Logistics—grew across the group. Their combined revenue increased 7% to $1.8 billion, and profit rose 16% to $193 million.
Higher Forecasts, Fewer Shares
The annual outlook now calls for pharmaceutical and specialty profit growth of 10%–12%, versus 8%–11% previously. For the remaining businesses, Cardinal Health raised expected profit growth to 17%–20% from 15%–18%, and revenue growth to 12%–14% from 11%–13%.
The earnings forecast implies growth of 17%–19% against fiscal 2026 adjusted earnings of $10.95 per share excluding a tariff refund, or 14%–15% against reported fiscal 2026 results. Those comparisons use different bases.
Cardinal Health completed $500 million in first-quarter buybacks. The timing of that accelerated repurchase helped lower its annual average diluted share forecast to 231 million–232 million from approximately 233 million; management also lowered its expected adjusted tax rate to 18.5%–19.5% from 19.0%–20.0%.
Jason Hollar, Cardinal Health’s CEO, tied the increase to the quarter and the revised expectations: “Given this quarter's strong performance and our updated expectations for the remainder of the year, we are raising our fiscal 2027 non-GAAP EPS outlook.”
Cash And Distribution Expansion
Operating cash generation reached $1,398 million, compared with $973 million a year earlier. Under standard accounting, profit attributable to Cardinal Health increased 23% to $554 million, while diluted earnings per share rose 27% to $2.38. Operating earnings increased 13% to $753 million; adjusted operating earnings grew 17% to $1.0 billion.
Cardinal Health also entered a binding letter of intent to renew pharmaceutical distribution agreements with CVS Health. Other developments included an additional $1.0 billion in uncommitted revolving credit facilities and the launch of INSIGHT-IBD with Eli Lilly, a study of treatment patterns and outcomes for patients with inflammatory bowel disease in routine care.
CAH shares rose about 1% to $271.81 in Friday trading.
Cardinal Health anticipates completing its purchase of AdaptHealth’s Diabetes Health business in the third quarter of fiscal 2027.
Sources
- 8-K Filing — CARDINAL HEALTH INC (CAH) — SEC EDGAR
- Exhibit a27q1_x093026xex991xnewsre.htm — CARDINAL HEALTH INC 8-K exhibit — SEC EDGAR
- Cardinal Health (NYSE:CAH) posts better-than-expected sales in Q3 CY2026 — Yahoo Finance
- Cardinal Health beats top-line and bottom-line estimates; raises FY26 outlook | Seeking Alpha — seekingalpha.com
- Cardinal: Fiscal Q1 Earnings Snapshot | khou.com — Associated Press
- CAH Q1 Earnings Call Highlights Raised Outlook and Specialty Growth — Yahoo Finance
- Cardinal Health Reports First Quarter Fiscal Year 2027 Results and Raises Outlook — prnewswire.com
