Cardinal Health Latest News

- Revenue increased 13% to $44.0 billion

- GAAP(1) operating earnings were $415 million, GAAP diluted EPS were $0.94

- Non-GAAP operating earnings decreased 15% to $527 million, non-GAAP diluted EPS decreased 15% to $1.29

- Board of Directors approved a 3-year authorization to repurchase up to an additional $3 billion of Cardinal Health common shares

- FY22 non-GAAP EPS guidance reaffirmed, long-term financial targets announced

DUBLIN, Ohio, Nov. 9, 2021 /PRNewswire/ -- Cardinal Health (NYSE: CAH) today reported first quarter fiscal year 2022 revenues of $44.0 billion, an increase of 13% from the first quarter of last year. First quarter GAAP operating earnings were $415 million and GAAP diluted earnings per share (EPS) were $0.94. Prior year first quarter GAAP results included an operating loss of $624 million due to a $1.0 billion pretax accrual related to opioid litigation. Non-GAAP operating earnings decreased 15% to $527 million in the quarter, primarily due to a decline in Medical segment profit. Non-GAAP diluted earnings per share decreased 15% to $1.29.
 

"Our first quarter results were in line with our expectations," said Mike Kaufmann, CEO of Cardinal Health. "We are reaffirming our full-year non-GAAP EPS guidance, despite our expectation that we will see greater inflationary pressures in the Medical segment for the remainder of the year, which we are taking action to mitigate. With an additional $3 billion share repurchase authorization and our commitment to our dividend, we are positioned to return capital to shareholders, while prioritizing investment in our growth businesses, technology and digital transformation, simplifying our operating model, and strengthening our core businesses," Kaufmann concluded.
 

Q1 FY22 summary

Segment results

Pharmaceutical segment

First-quarter revenue for the Pharmaceutical segment increased 13% to $39.8 billion, driven primarily by branded pharmaceutical sales growth from large Pharmaceutical Distribution and Specialty customers.
 

Pharmaceutical segment profit increased 1% to $406 million in the first quarter. This reflects an improvement in volumes compared to the prior year, which was adversely impacted by COVID-19. This improvement was largely offset by investments in technology enhancements.

Medical segment

First-quarter revenue for the Medical segment increased 5% to $4.1 billion, driven primarily by PPE sales. This was partially offset by the divestiture of the Cordis business.
 

Medical segment profit decreased 46% to $123 million in the first quarter primarily due to elevated supply chain costs. To a lesser extent, this also reflects the divestiture of the Cordis business as well as net favorability in the prior year attributed to COVID-19.
 

Fiscal year 2022 outlook¹
The company reaffirmed its fiscal year 2022 guidance range for non-GAAP diluted earnings per share attributable to Cardinal Health, Inc. of $5.60 to $5.90.
 

This guidance includes an update to Medical segment profit outlook to mid-single to low-double digit percentage decline, from low-double digit percentage growth. This update reflects net incremental elevated supply chain costs of approximately $100 million to $125 million. Additionally, the company updated expectations for its fiscal 2022 non-GAAP effective tax rate to 23% to 25%, from 23.5% to 25.5%, and its diluted weighted average shares outstanding to 280 million to 282 million, from 287 million to 292 million.
 

The company does not provide forward-looking guidance on a GAAP basis as certain financial information, the probable significance of which cannot be determined, is not available and cannot be reasonably estimated. See "Use of Non-GAAP Measures" following the attached schedules for additional explanation.
 

Long-term financial targets
The company announced long-term segment profit targets of low to mid-single digit growth in the Pharmaceutical segment and mid to high-single digit growth in the Medical segment. The company is also targeting to average a double-digit combined Non-GAAP EPS growth and dividend yield.
 

Recent highlights

• Cardinal Health Board of Directors approved a 3-year authorization to repurchase up to an additional $3 billion of Cardinal Health common shares, which will expire on December 31, 2024.
• Cardinal Health, along with pharmaceutical distribution peers, announced that enough states have agreed to participate in the previously announced proposed settlement agreement to proceed to the next phase, which is the subdivision sign-on period.
• Cardinal Health announced a comprehensive talent strategy to increase representation of diverse employees at the manager level and above by 2030 and established a goal to reduce Scope 1 and Scope 2 greenhouse gas emissions 50% by 2030.
• Cardinal Health announced that it has extended its agreements with CVS Health to distribute pharmaceuticals to retail pharmacies and distribution centers through June 30, 2027.
• Cardinal Health announced an agreement with TerraPower that will help develop and produce Actinium-225, which will be utilized in drug trials involving targeted alpha therapy for diseases such as breast, prostate, colon and neuroendocrine cancers, melanoma and lymphoma.
• Cardinal Health announced its efforts to commercialize and broaden access to over-the-counter rapid COVID-19 tests through partnerships with Abbott and Quidel Corporation.
   

Upcoming webcasted investor events

• Credit Suisse 30th Annual Healthcare Conference at 10:30 a.m. EST, November 10, 2021
• J.P. Morgan 40th Annual Healthcare Conference on January 10-13, 2022
   

Webcast
Cardinal Health will host a webcast today at 8:30 a.m. EST to discuss first quarter results. To access the webcast and corresponding slide presentation, go to the Investor Relations page at ir.cardinalhealth.com. No access code is required. 
 

Presentation slides and a webcast replay will be available until November 8, 2022.
 

About Cardinal Health
Cardinal Health is a distributor of pharmaceuticals, a global manufacturer and distributor of medical and laboratory products, and a provider of performance and data solutions for health care facilities. With 50 years in business, operations in more than 35 countries and approximately 44,000 employees globally, Cardinal Health is essential to care. Information about Cardinal Health is available at cardinalhealth.com.
 

Contacts
Media: Erich Timmerman, Erich.Timmerman@cardinalhealth.com and 847.887.1487
Investors: Kevin Moran, Kevin.Moran@cardinalhealth.com and 614.757.7942
 

¹ GAAP refers to U.S. generally accepted accounting principles. This news release includes GAAP financial measures as well as non-GAAP financial measures, which are financial measures not calculated in accordance with GAAP. See "Use of Non-GAAP Measures" following the attached schedules for definitions of the non-GAAP financial measures presented in this news release and see the attached schedules for reconciliations of the differences between the non-GAAP financial measures and their most directly comparable GAAP financial measures.
² The first quarter fiscal 2021 GAAP effective tax rate included the tax effects of opioid litigation charges in the calculation of the company's estimated annual effective tax rate which increased the amount of GAAP tax benefit in the first quarter of fiscal 2021 by approximately $450 million.
 

Cardinal Health uses its website as a channel of distribution for material company information. Important information, including news releases, financial information, earnings and analyst presentations, and information about upcoming presentations and events is routinely posted and accessible on the Investor Relations page at ir.cardinalhealth.com. In addition, the website allows investors and other interested persons to sign up automatically to receive email alerts when the company posts news releases, SEC filings and certain other information on its website.
 

Cautions Concerning Forward-Looking Statements
This release contains forward-looking statements addressing expectations, prospects, estimates and other matters that are dependent upon future events or developments. These statements may be identified by words such as "expect," "anticipate," "intend," "plan," "believe," "will," "should," "could," "would," "project," "continue, "likely," and similar expressions, and include statements reflecting future results or guidance, statements of outlook and various accruals and estimates. These matters are subject to risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied. These risks and uncertainties include risks arising from the ongoing COVID-19 pandemic and our critical role in the global healthcare supply chain, including our ability to recoup or mitigate cost increases and inflation, including costs to source certain personal protective or other equipment, increased costs for transportation, shipping, freight and commodities, reduced price or demand for certain products, which may result in additional inventory reserves, possible workforce issues resulting from COVID-19 vaccine mandates and the possible impact of disruptions of our distribution or manufacturing facilities; competitive pressures in Cardinal Health's various lines of business; the performance of our generics program, including the amount or rate of generic deflation and our ability to offset generic deflation and maintain other financial and strategic benefits through our generic sourcing venture with CVS Health; risks associated with the distribution of opioids, including the financial impact associated with the proposed settlement agreement and process we have negotiated with governmental authorities, including the risk that we may fail to reach a final settlement agreement or that a significant number of states and subdivisions may not agree to sign on the proposed settlement agreement, the risk that challenges to our plans to take tax deductions for opioid-related losses could adversely impact our financial results and risks arising from the Department of Justice investigation which we believe concerns our anti-diversion program; risks associated with the manufacture and sourcing of certain products, including risks related to our ability and the ability of third-party manufacturers to comply with applicable regulations; our ability to manage uncertainties associated with the pricing of branded pharmaceuticals; and risks associated with our cost savings initiatives including the possibility that they could fail to achieve the intended results. Cardinal Health is subject to additional risks and uncertainties described in Cardinal Health's Form 10-K, Form 10-Q and Form 8-K reports and exhibits to those reports. This release reflects management's views as of November 9, 2021. Except to the extent required by applicable law, Cardinal Health undertakes no obligation to update or revise any forward-looking statement. Forward-looking statements are aspirational and not guarantees or promises that goals, targets or projections will be met, and no assurance can be given that any commitment, expectation, initiative or plan in this report can or will be achieved or completed. Cardinal Health provides definitions and reconciliations of non-GAAP financial measures and their most directly comparable GAAP financial measures at ir.cardinalhealth.com.