DUBLIN, Ohio, Aug. 2, 2017 /PRNewswire/ -- Cardinal Health (NYSE: CAH) today reported fourth-quarter fiscal year 2017 revenues of $33 billion, an increase of 5 percent from the fourth quarter last year, and fiscal 2017 revenues of $130 billion, an increase of 7 percent from the same period last year. For the quarter, GAAP diluted earnings per share (EPS) decreased 16 percent to $0.86, while non-GAAP diluted EPS increased 15 percent to $1.31. GAAP diluted EPS for fiscal year 2017 decreased 7 percent to $4.03, and non-GAAP diluted EPS increased 3 percent to $5.40.
“While these last 12 months were clearly a dynamic period in healthcare and certainly presented challenges for our fiscal 17, it was also a year in which we took important actions to strengthen our market positioning, grow our scale, add new, long-term drivers of growth, and improve the overall balance of our integrated portfolio,” said George Barrett, chairman and CEO of Cardinal Health. “In spite of the challenges of the year, our team was able to deliver growth in non-GAAP EPS.”
Q4 and year-end FY17 summary
Q4 FY17 | Q4 FY16 | Y/Y | FY17 | FY16 | Y/Y | |
Revenue | $33.0 billion | $31.4 billion | 5% | $130.0 billion | $121.5 billion | 7% |
Operating |
$439 million |
$620 million |
(29%) |
$2,120 million |
$2,459 million |
(14%) |
Non-GAAP |
$640 million |
$643 million |
(1%) |
$2,769 million |
$2,895 million |
(4%) |
Net earnings |
$274 million |
$333 million |
(18%) |
$1,288 million |
$1,427 million |
(10%) |
Non-GAAP net |
$416 million |
$372 million |
12% |
$1,727 million |
$1,732 million |
- |
Diluted EPS | $0.86 | $1.02 | (16%) | $4.03 | $4.32 | (7%) |
Non-GAAP |
$1.31 |
$1.14 |
15% |
$5.40 |
$5.24 |
3% |
Diluted EPS for the quarter and year benefitted from a lower effective tax rate and fewer weighted average shares outstanding than the prior-year periods.
Segment results
Pharmaceutical segment
Fourth-quarter revenue for the Pharmaceutical segment increased 5 percent to $29.6 billion due to growth from Pharmaceutical Distribution customers and strong performance from the Specialty Solutions business. Segment profit decreased 7 percent to $505 million. This decrease was driven by generic pharmaceutical pricing and the company’s ongoing investment in its Pharmaceutical IT platform. These were partially offset by solid performance from Red Oak Sourcing.
Full-year revenue for the Pharmaceutical segment increased 7 percent to $116.5 billion due to growth from Pharmaceutical Distribution customers and strong performance from the Specialty Solutions business. Segment profit for the year decreased 12 percent to $2.2 billion driven by generic pharmaceutical pricing, and to a lesser extent, the impact of the loss of Safeway and reduced levels of branded manufacturer price appreciation. These were partially offset by solid performance from Red Oak Sourcing.
Q4 FY17 | Q4 FY16 | Y/Y | FY17 | FY16 | Y/Y | |
Revenue | $29.6 billion | $28.2 billion | 5% | $116.5 billion | $109.1 billion | 7% |
Segment profit | $505 million | $542 million | (7%) | $2.2 billion | $2.5 billion | (12%) |
Medical segment
Revenue for the Medical segment increased 6 percent to $3.4 billion driven by contributions from new and existing customers. Segment profit increased 13 percent to $138 million reflecting solid performance from post-acute solutions, favorability from compensation-related items and growth in distribution services. These were partially offset by performance in Cardinal Health Branded products (including Cordis).
Full-year revenue for the Medical segment increased 9 percent to $13.5 billion due to contributions from new and existing customers and, to a lesser extent, acquisitions. Segment profit increased 25 percent to $572 million due to the contribution from post-acute solutions, Cardinal Health Branded products (including Cordis), favorability from compensation-related items and growth in distribution services.
Q4 FY17 | Q4 FY16 | Y/Y | FY17 | FY16 | Y/Y | |
Revenue | $3.4 billion | $3.2 billion | 6% | $13.5 billion | $12.4 billion | 9% |
Segment profit | $138 million | $122 million | 13% | $572 million | $457 million | 25% |
Outlook
The company does not provide GAAP EPS outlook because it is unable to reliably forecast most of the items that are excluded from GAAP EPS to calculate non-GAAP EPS. These items could cause EPS to differ materially from non-GAAP EPS. See “Use of Non-GAAP Measures” following the attached schedules for additional explanation.
The company’s fiscal year 2018 guidance range for non-GAAP diluted EPS from continuing operations is $4.85 to $5.10. This guidance now reflects incremental discrete items of $0.16 per share, identified since the early outlook announcement provided in April.
In a further comment on the year ahead, Barrett said: “As we indicated in our April early outlook, we expected our fiscal 2018 non-GAAP EPS to be down. Our perspective and operating expectations have not meaningfully changed. We are, however, taking some discrete actions, which will affect our EPS in FY18 and will improve our trajectory for 2019 and beyond. And we are targeting fiscal 2019 non-GAAP EPS of at least $5.60.”
FY17 and recent highlights
- Completed the acquisition of Medtronic’s Patient Care, Deep Vein Thrombosis and Nutritional Insufficiency business for $6.1 billion on July 29, 2017
- Acquired rights to Navidea’s Lymphoseek, a radiopharmaceutical diagnostic imaging agent
- Convened the 27th annual Retail Business Conference, which provided one of the industry’s largest lineups of continuing education courses, buying opportunities, and access to Cardinal Health solutions that help independent pharmacists diversify and improve their business
- Through the Cordis business, became the exclusive U.S. distributor of the Tryton Side Branch Stent, the first dedicated bifurcation device to receive regulatory approval in the U.S. to treat significant coronary bifurcation lesions
- Increased quarterly dividend by 3 percent to $0.4624 per share, or $1.85 on an annualized basis
Awards and recognition
Over the past year, Cardinal Health was recognized for its leadership and commitment to diversity and sustainability, including:
- Named on the 2017 World’s Most Admired Companies list by Fortune
- Recognized by the National Association for Female Executives as a Top 60 Company for Executive Women for the sixth consecutive year
- Included in Becker’s Healthcare 150 Top Places to Work in Healthcare 2017 listing
- Named to the Human Rights Campaign (HRC) Best Places to Work for LGBT Equality for the fifth consecutive year based on ratings in HRC’s 2017 Corporate Equality Index
- Included in the Dow Jones Sustainability North American Company Index for the eleventh consecutive year
Webcast
Cardinal Health will host a webcast today at 8:30 a.m. Eastern to discuss fourth-quarter and year-end 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 on the Cardinal Health website at ir.cardinalhealth.com until Aug. 1, 2018.
Upcoming webcasted investor events
- Robert W. Baird’s Global Healthcare Conference on Thursday, Sept. 7 at 9:05 a.m. Eastern in New York City
- Morgan Stanley 15th Annual Global Healthcare Conference on Monday, Sept. 11 at
8:45 a.m.
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