Cardinal Health sees earnings dip in Q4, full year amid strong sales

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Cardinal Health headquarters.

Cardinal Health sees earnings dip in Q4, full year amid strong sales

By Sandra Levy - 08/06/2020

Facing the headwinds of the COVID-19 pandemic, Cardinal Health on Thursday reported fourth-quarter 2020 revenues of $ 36.7 billion, a decrease of 2% from the same period last year. The Dublin, Ohio-based company saw its full-year revenue increase to $152.9 billion, a 5% hike from fiscal year 2019.

For the fourth quarter, operating earnings were $270 million, a decrease of 12% from the same period last year. For the fiscal year, operating loss was $4.1 billion. For fiscal 2020, diluted loss per share was $12.61. Fourth-quarter earnings per share were $2.23. 

"In fiscal 2020, we delivered on our commitments, grew operating earnings and exceeded our EPS guidance, despite the unprecedented global environment," said Mike Kaufmann, Cardinal Health CEO. "We play an essential role in healthcare, and I'd like to thank our employees, especially our frontline teams, for their dedication under the challenging circumstances of the past several months. Our strong performance in fiscal 20 and the unwavering commitment of our employees will enable us to manage the complexities ahead, serve our customers and their patients, and continue our growth."

Fourth-quarter revenue for the pharmaceutical segment was flat at $33.2 billion, which Cardinal Health attributed to reduced pharmaceutical demand as a result of the accelerated third-quarter sales related to COVID-19.

Pharmaceutical segment profit was at $359 million in the quarter, a decrease of 20% from $447 million in the prior-year period, which Cardinal attributed to expected COVID-19-related volume declines, which primarily affected nuclear and precision health solutions, as well as the company's generics program. Pharmaceutical distribution customer contract renewals also adversely affected segment profit, the company said.

Fourth-quarter revenue for the medical segment decreased by 13% to $3.5 billion. The company attributed the decrease to the adverse effects of canceled or deferred elective procedures related to COVID-19, primarily on products and distribution.

Medical segment profit increased 24% to $120 million in the quarter. Cardinal Health attributed the segment's increase to benefits from cost savings initiatives and the beneficial comparison to a supplier-related charge in the prior year. This was partially offset by the adverse effects of COVID-19, primarily on products and distribution, Cardinal said.

Cardinal Health’s set its fiscal year 2021 guidance range for non-GAAP EPS from $5.25 to $5.65.