Cardinal Health realizes revenue gains but earnings decline behind pricing headwinds

DUBLIN, Ohio - Cardinal Health on Monday reported first-quarter fiscal year 2017 revenue of $32 billion, an increase of 14% from the comparable quarter last year.



The company also reported a decline in GAAP operating earnings of 14% to $535 million. GAAP diluted earnings per share decreased 17% to $0.96.



"Our first-quarter results were largely as we suggested they would be, with a healthy increase in revenue and a decrease in our operating earnings largely driven by conditions in the pharmaceutical distribution market," stated George Barrett, chairman and CEO of Cardinal Health. "While short-term headwinds, particularly around pharmaceuticals, are quite challenging, our Medical segment had an excellent quarter building on the momentum coming out of fiscal year 2016. From an operating perspective, our metrics were strong in both of our reporting segments, and our strategic positioning is well-aligned with the changing needs of the market."



First-quarter revenue for the Pharmaceutical segment increased 14%  to $28.8 billion due to growth from net new and existing Pharmaceutical Distribution customers and, to a lesser extent, performance from the Specialty business.



Segment profit for the quarter decreased 19% to $534 million. This decrease was driven by generic pharmaceutical pricing and, to a lesser extent, reduced levels of branded inflation and the previously announced loss of a large Pharmaceutical Distribution customer. This was partially offset by solid performance from Red Oak Sourcing.