Cardinal Health Inc(NYSE: CAH) stock lost over 9.4% on August 2nd, 2017 (As of 1: 38 pm EDT; Source: Google finance) as investors were disappointed with their fourth quarter of 2017 update. The group’s GAAP diluted earnings per share (EPS) lost 16 percent on a yoy basis to $0.86 during the quarter. Moreover, the group reported that they are not able to give a proper GAAP EPS outlook as they are not able to expect most of the items that are excluded from GAAP EPS to calculate non-GAAP EPS.
Cardinal Health expects their non-GAAP diluted EPS from continuing operations to be in the range of $4.85 to $5.10 for the fiscal year of 2018. This also includes incremental discrete items of $0.16 per share. They forecast their fiscal 2018 non-GAAP EPS to be down as per their estimates in April. On the other hand, the group reported that they are taking steps which would enhance their trajectory for 2019 and beyond while targeting a fiscal 2019 non-GAAP EPS of at least $5.60.
Meanwhile, the group finished the acquisition of Medtronic’s Patient Care, Deep Vein Thrombosis and Nutritional Insufficiency business for $6.1 billion on July 29, 2017. They also bought rights to Navidea’s Lymphoseek, a radiopharmaceutical diagnostic imaging agent. They became exclusive U.S. distributor of the Tryton Side Branch Stent via the Cordis business, which is the first dedicated bifurcation device to receive regulatory approval in the U.S. to treat significant coronary bifurcation lesions. Despite the volatile performance, their enhanced the quarterly dividend by 3% to $0.4624 per share, or $1.85 on an annualized basis.
The Pharmaceutical segment revenue rose 5% yoy to $29.6 billion during the quarter on the back of better Pharmaceutical Distribution customers coupled with solid Specialty Solutions business. But Segment profit lost 7% yoy to $505 million hurt by generic pharmaceutical pricing and ongoing investment in their Pharmaceutical IT platform. This was partially offset by a solid performance from Red Oak Sourcing. For 2017, the segment revenue enhanced 7% yoy to $116.5 billion but profit lost 12% yoy to $2.2 billion during the year hurt by loss of Safeway and reduced levels of branded manufacturer price appreciation. The group’s Medical segment Revenue rose 6% yoy to $3.4 billion on the back of better performance in customers. Segment profit surged 13% yoy to $138 million driven by post-acute solutions, and better distribution services. But Cardinal Health Branded products (including Cordis) offset the performance.