Cardinal Health stock raises FY2027 EPS outlook after strong Q1

Cardinal Health reported a stronger-than-expected start to fiscal 2027 on Thursday, November 5. In the earnings release carried by Fidelity, the healthcare distributor said fiscal first-quarter revenue rose 5 percent year over year to 67.5 billion US dollars.

GAAP operating earnings increased 13 percent to 753 million US dollars, while GAAP diluted earnings per share rose 27 percent to 2.38 US dollars. On a non-GAAP basis, operating earnings advanced 17 percent to 1.0 billion US dollars and diluted EPS climbed 28 percent to 3.26 US dollars. The adjusted figure excludes items including acquisition-related costs, restructuring, litigation recoveries and other specified charges.

Pharmaceutical segment drives growth

The Pharmaceutical and Specialty Solutions segment remained the main growth engine. Revenue increased 6 percent to 62.6 billion US dollars, and segment profit rose 17 percent to 783 million US dollars. Cardinal Health attributed the advance to brand and specialty pharmaceutical sales from existing customers as well as a positive contribution from its generics program.

Performance was more mixed in the remaining businesses. Global Medical Products and Distribution revenue was broadly unchanged at 3.2 billion US dollars, while segment profit fell 28 percent to 33 million US dollars because of unfavorable distribution and foreign exchange effects. Revenue in the Other segment increased 7 percent to 1.8 billion US dollars, with profit up 16 percent to 193 million US dollars.

Guidance moves higher for fiscal 2027

Cardinal Health raised its fiscal 2027 non-GAAP diluted EPS outlook to 12.80 to 13.00 US dollars from the previous range of 12.40 to 12.60 US dollars. The company said the new range represents growth of 17 to 19 percent from its fiscal 2026 adjusted baseline excluding the prior year's IEEPA tariff refund, and 14 to 15 percent from reported fiscal 2026 results.

Management also increased its Pharmaceutical and Specialty Solutions profit-growth outlook to 10 to 12 percent from 8 to 11 percent. Other segment revenue growth is now expected at 12 to 14 percent, compared with 11 to 13 percent previously, while Other segment profit growth guidance moved to 17 to 20 percent from 15 to 18 percent. Cardinal Health lowered its expected non-GAAP effective tax rate to 18.5 to 19.5 percent and now expects diluted weighted-average shares of 231 million to 232 million after the timing of a 500 million US dollar accelerated share repurchase.

Chief Executive Jason Hollar said the results reflected a strong start to the fiscal year and consistent execution against strategic priorities. The company also said it had completed the 500 million US dollar share repurchase program during the quarter and ended September 30 with 5.264 billion US dollars in cash and equivalents.

Stock context after the release

Cardinal Health stock traded at 235.70 euros on Lang & Schwarz at 2:02 p.m. CET on Friday, November 6. The quote is a euro-based trading indication and does not establish a comparison with the New York Stock Exchange share price.

Investors can follow the real-time quote of Cardinal Health stock as the market assesses the raised earnings outlook, segment execution and the effect of share repurchases on per-share results.

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