Cardinal Health (NYSE:CAH) today reported mixed second quarter results and cut its EPS guidance as the company’s Medical segment continues to wrestle with inflation and supply chain problems.
The Dublin, Ohio–based pharma and medtech giant reported profits of $49 million, or 17¢ per share, on sales of $45.5 million for the three months ended Dec. 31, 2021, for a bottom-line drop of 92% on top-line growth of 9%.
Adjusted to exclude one-time items, earnings per share were $1.27, 4¢ ahead of The Street, where analysts were looking EPS of $1.23 on sales of $45.57 billion.
Medical segment revenue was down 5% to $4.1 billion, primarily due to the divestiture of the Cordis business. The segment’s profits were down 79%, with Cardinal Health repeating its caution about global supply chain constraints. The company already warned in January that the problems will cost impact Medical segment profits by $150–175 million this fiscal year.
Cardinal Health’s Pharma segment meanwhile saw revenue increase 11% to $41.4 billion, with profits up 3% to $426 million.
“We’re taking action to drive performance in the Medical segment, including evolving our commercial contracting strategies and driving mix, simplifying our operating model, and investing in our growth businesses,” Cardinal Health CEO Mike Kaufmann said in a news release. “Our second-quarter results demonstrate continued performance in other areas, including: growth in the Pharma segment, progress towards our $750 million enterprise cost savings target, strong cash flow generation, and efficient capital deployment.”
Cardinal Health said it expects to log adjusted EPS of $5.15– 5.50 this fiscal year, down from prior guidance of $5.60–$5.90.
Investors reacted by sending Cardinal Health shares down slightly to $51.56 apiece by late morning trading MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — was also down slightly.