Cardinal Health reports growth in Q3 revenue, raises fiscal year 2024 non-GAAP EPS guidance
Cardinal Health today reported third quarter fiscal year 2024 revenues of $54.9 billion, an increase of 9% from the third quarter of fiscal year 2023. Third quarter GAAP operating earnings were $367 million and GAAP diluted earnings per share were $1.05, which included a non-cash, pre-tax goodwill impairment of $90 million related to the global medical products and distribution segment as a result of the reallocation of goodwill related to the reporting structure update.
The Dublin, Ohio-based company's third quarter non-GAAP operating earnings increased 10% to $666 million driven by growth in global medical products and distribution segment profit and pharmaceutical and specialty solutions segment profit. Non-GAAP diluted EPS increased 20% to $2.08, primarily due to the growth in non-GAAP operating earnings and a lower share count.
"In Q3, we delivered broad-based growth, including solid profit growth in pharmaceutical and specialty solutions, on top of an exceptionally strong quarter from a year ago," said Jason Hollar, CEO of Cardinal Health. "We were also pleased to see the ongoing acceleration in GMPD. With confidence in our outlook for the year, we are raising and narrowing our FY24 EPS guidance and providing preliminary guidance for FY25 that reflects the strength and resiliency of our company."
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Cardinal Health's third quarter revenue for the pharmaceutical and specialty solutions segment increased 9% to $50.7 billion, driven by brand and specialty pharmaceutical sales growth from existing customers, the company said.
Pharmaceutical and specialty solutions segment profit increased 4% to $580 million in the third quarter, driven by positive generics program performance.
Third quarter revenue for the global medical products and distribution segment increased 4% to $3.1 billion, driven by volume growth from existing customers, Cardinal Health said.
Global medical products and distribution segment profit increased $66 million to $20 million in the third quarter, driven by an improvement in net inflationary impacts, including mitigation initiatives, the company noted.
Cardinal Health's third quarter revenue for other increased 14% to $1.2 billion, driven by growth across the three operating segments: At-home solutions, nuclear and precision health solutions and OptiFreight Logistics.
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Other segment profit increased 5% to $111 million in the third quarter, due to the performance of OptiFreight Logistics, Cardinal Health said.
The company raised and narrowed its fiscal year 2024 guidance range for non-GAAP diluted earnings per share to $7.30 to $7.40, from $7.20 to $7.35.
This guidance includes an update to the company's pharmaceutical and specialty solutions segment profit outlook to 8.5% to 9.5% growth, from 7% to 9% growth.
Additionally, the company updated expectations for its non-GAAP effective tax rate to a range of 22% to 23%, from 23% to 24%.
Cardinal Health also provided preliminary guidance for fiscal year 2025:
- Non-GAAP diluted EPS of at least $7.50
- Pharmaceutical and specialty solutions at least 1% segment profit growth
- Global medical products and distribution ~$175M segment profit
- Other ~10% segment profit growth