Stable fundamentals in the pharmaceutical segment and tangible progress in the medical segment drove Cardinal Health's first quarter fiscal year 2023 revenues to $49.6 billion, an increase of 13% from the same period last year, the company said.
GAAP operating earnings for the quarter were $137 million, including a non-cash, pre-tax goodwill impairment charge of $154 million in the medical segment. GAAP diluted earnings per share were 40 cents.
Non-GAAP operating earnings decreased 20% to $423 million in the quarter due to a decline in medical segment profit, primarily resulting from net inflationary impacts. The decrease was partially offset by an increase in pharmaceutical segment profit, Cardinal Health said.
Non-GAAP diluted earnings per share decreased 7% to $1.20, reflecting the change in non-GAAP operating earnings, partially offset by lower interest expense and a lower non-GAAP effective tax rate and share count, the company said.
"Our performance in the first quarter demonstrated stable fundamentals in the pharmaceutical segment and tangible progress in the medical segment," said Jason Hollar, CEO of Cardinal Health. "We are reaffirming our full year non-GAAP EPS guidance as we remain focused on our Medical Improvement Plan initiatives and building upon the growth of our pharmaceutical business. Across the company, we are operating with urgency to drive our businesses forward and remain committed to creating shareholder value."
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Pharmaceutical segment revenue for the quarter increased 15% to $45.8 billion, driven by branded pharmaceutical sales growth from existing and net new pharmaceutical distribution and specialty customers, the company said.
Pharmaceutical segment profit increased 6% to $431 million in the quarter, driven by generics program performance and a higher contribution from brand and specialty products, partially offset by inflationary supply chain costs.
The medical segment's revenue for the quarter decreased 9% to $3.8 billion, driven by lower products and distribution sales, primarily due to PPE pricing and volumes. To a lesser extent, this also reflects the divestiture of the Cordis business, which was mostly offset by sales growth in at-Home Solutions, Cardinal Health noted.
Medical segment loss of $8 million in the quarter was primarily due to net inflationary impacts in products and distribution and a lower contribution from PPE, Cardinal Health said. The first quarter loss reflects $20 million in total inventory charges related to the previously-announced simplification actions, including the sale of certain disposable gloves primarily utilized in non-healthcare industries, the company said.
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Cardinal reaffirmed its fiscal year 2023 guidance range for non-GAAP diluted earnings per share of $5.05 to $5.40.