Cardinal Health shares rise 2.3% after Q1 profit beat, raised forecast

Cardinal Health (CAH) raised its fiscal 2027 adjusted earnings forecast after first-quarter adjusted EPS of $3.26 topped the $2.97 consensus estimate.

Shares rose 2.3% at 3:59 p.m. ET, from a $261.93 close.

Revenue rose 5%.

Here's how the company did:

• Adjusted EPS: $3.26 vs. $2.55 a year earlier, $2.97 expected
• Revenue: $67.51 billion vs. $64.01 billion a year earlier, $67.25 billion expected
• GAAP diluted EPS: $2.38 vs. $1.88 a year earlier
• Adjusted operating earnings: $1.00 billion vs. $857 million a year earlier

Adjusted diluted EPS rose 28%, reflecting higher adjusted operating earnings, a lower share count and a lower effective tax rate. GAAP operating earnings rose 13% to $753 million.

Chief Executive Officer Jason Hollar said, "we are raising our fiscal 2027 non-GAAP EPS outlook."

2027 guidance

It now expects adjusted EPS of $12.80 to $13.00 for fiscal 2027, up from $12.40 to $12.60. That equals 17% to 19% growth from fiscal 2026 adjusted EPS of $10.95, which excludes a tariff refund benefit, and 14% to 15% growth from reported fiscal 2026 results.

Pharmaceutical and Specialty Solutions profit is now expected to grow 10% to 12%, from 8% to 11%. Other profit growth is now 17% to 20%, from 15% to 18%. Other revenue growth is now 12% to 14%, from 11% to 13%.

The non-GAAP effective tax rate is lowered to 18.5% to 19.5%, from 19.0% to 20.0%. It expects 231 million to 232 million diluted weighted average shares, from about 233 million, reflecting the timing of the $500 million accelerated share repurchase in the first quarter.

Segment results

Pharmaceutical and Specialty Solutions revenue rose 6% to $62.58 billion, and segment profit rose 17% to $783 million. Growth came from brand and specialty products and positive generics program performance.

Global Medical Products and Distribution revenue was roughly flat at $3.19 billion. Segment profit fell to $33 million from $46 million, due to unfavorable distribution and foreign exchange impacts, partly offset by growth in Cardinal Health Brand.

Other revenue rose 7% to $1.8 billion, and Other profit rose 16% to $193 million.

Cash and recent developments

Cash from operating activities was $1.40 billion, up from $973 million a year earlier.

The company entered into a binding letter of intent to renew its pharmaceutical distribution agreements with CVS Health. It expects to complete its acquisition of AdaptHealth's Diabetes Health business in the third quarter of fiscal 2027.