Cardinal Health posts revenue growth in Q1

Cardinal Health today reported an increase in revenues for the first quarter, while raising its outlook for fiscal year 2024. 

The Dublin, Ohio-based company' first quarter fiscal 2024 revenues were $54.8 billion, an increase of 10% from the first quarter of last year. 

The company’s first quarter GAAP operating loss was $14 million due to a non-cash, pre-tax goodwill impairment of $581 million related to the medical segment, due to an increase in the discount rate, the company said.

GAAP diluted earnings per share were 2 cents, primarily due to this impairment, net of tax effects. Non-GAAP operating earnings increased 35% to $571 million in the quarter, driven by significant increases in both the pharmaceutical segment profit and medical segment profit. Non-GAAP diluted EPS increased 44% to $1.73, reflecting the increase in non-GAAP operating earnings, a lower share count and lower interest and other expense. The increase was partially offset by a higher non-GAAP effective tax rate, Cardinal Health said.

[Read more: Cardinal Health posts revenue growth in Q4, full year]

"With strong first quarter results and an improved outlook for the year, we are continuing our operating momentum into fiscal 2024," said Jason Hollar, CEO of Cardinal Health. "In Q1, we delivered significant profit growth in both the pharmaceutical and medical segments, which along with our favorable capital structure and opportunistic capital deployment, gives us confidence to raise fiscal 2024 non-GAAP EPS guidance. Across the enterprise, we continue to prioritize focused execution to best serve our customers and create value for our shareholders."

First quarter revenue for Cardinal Health's pharmaceutical segment increased 11% to $51 billion, driven by brand and specialty pharmaceutical sales growth from existing customers.

Pharmaceutical segment profit increased 18% to $507 million in the first quarter, driven by a higher contribution from brand and specialty products, including distribution of COVID-19 vaccines, and positive generics program performance.

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First quarter revenue for the medical segment was flat at $3.8 billion. This reflects lower PPE volumes and pricing, offset by growth in at-Home Solutions and inflationary impacts, including mitigation initiatives. PPE volumes and pricing includes the impact from the prior year exit of Cardinal Health’s non-healthcare gloves portfolio in connection with its simplification strategy, the company said.

Cardinal Health’s medical segment profit increased to $71 million in the first quarter, driven by an improvement in net inflationary impacts, including mitigation initiatives.

The company raised its fiscal 2024 guidance range for non-GAAP diluted earnings per share to $6.75 to $7.00, from $6.50 to $6.75.

This guidance includes an update to the company's pharmaceutical segment profit outlook for fiscal 2024 to 7% to 9% growth, from 4% to 6% growth. Additionally, the company updated expectations for interest and other to $100 million to $120 million, from $110 million to $130 million, and for diluted weighted average shares outstanding of approximately 249 million, from 250 million to 253 million.