Cardinal Health (NYSE:CAH) shares took a hit today on third-quarter results that missed the consensus earnings forecast.
CAH shares were down 5.3% at $57.30 per share in mid-afternoon trading today. MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — was down 3.1%. Today, the Dow Jones Industrial Average was down more than 3%, more than 1,100 points, as investors reevaluated the economic effects of the Federal Reserve’s plans to combat inflation.
The Dublin, Ohio-based company posted losses of $97 million, or $5.05 per share, on sales of $44.8 billion for the three months ended March 31, 2022, for a bottom-line slide into the red on sales growth of 14%.
Adjusted to exclude one-time items, earnings per share were $1.45, 7¢ behind Wall Street, where analysts were looking for sales of $43.2 billion.
Cardinal Health’s medical segment brought in 7% less revenues than the same quarter last year, while the segment’s profit dipped by 66% year over year. The company attributed its losses in the quarter in large part to a non-cash, pre-tax goodwill impairment of $474 million in its medical segment.
“While we’re taking action to drive performance across all our businesses, particularly the medical segment, our third quarter results reflect continued inflationary impacts and global supply chain constraints,” Cardinal Health CEO Mike Kaufmann said in a news release. “We have updated our outlook for medical to reflect the challenging environment, and reiterated our outlook for the pharmaceutical segment in fiscal year 2022. Going forward, we remain confident in our ability to drive sustainable, long-term growth.”
Cardinal Health updated its 2022 adjusted EPS guidance to a range of $5.15 to $5.25, keeping the low end the same while decreasing the high end by 25¢.
The company also updated expectations for its medical segment, with projections of a 45% to 55% decline in profits. The company had previously expected a 30%-45% decline. The medical outlook includes a year-over-year net incremental headwind of nearly $300 million due to inflationary and global supply chain constraint impacts.
