Cardinal Health Lifts FY24 View Above Market After Profit In Q4, Plans Buyback; Stock Up

(RTTNews) - Shares of Cardinal Health, Inc. were gaining more than 7 percent in the pre-market activity on the NYSE after the healthcare company on Wednesday raised its fiscal 2024 adjusted earnings forecast above the market after reporting a profit in its fourth quarter, compared to prior year's loss. The improved results reflected strong revenues from both segments.

Further, the company raised share repurchase expectations in fiscal year 2025 by $250 million to a total of $750 million.

Jason Hollar, CEO of Cardinal Health, said, "Fiscal 2024 marked a year of strong operational execution and record financial results, delivered in tandem with key strategic progress in the portfolio. We delivered robust cash flow generation, continued profit growth in the Pharmaceutical and Specialty Solutions segment and significant improvement driven by our GMPD Improvement Plan. We enter the new fiscal year with momentum and confidence, evidenced by our raised fiscal year 2025 guidance."

Additionally, by fiscal year 2026, Cardinal Health is targeting at least $500 million in near-term value creation from Global Medical Products and Distribution or GMPD through further simplification actions and working capital improvements.

For fiscal 2025, the company now expects adjusted earnings per share of $7.55 to $7.70, higher than previously expected at least $7.50. In fiscal 2024, adjusted earnings per share were $7.53.

Analysts on average expect the company to report earnings of $7.53 per share, according to figures compiled by Thomson Reuters. Analysts' estimates typically exclude special items.

The company also updated its Pharmaceutical and Specialty Solutions segment profit growth outlook to 1 percent to 3 percent growth from at least 1 percent growth expected earlier. Meanwhile, the segment is expected to record 4 percent to 6 percent decline in revenues.

GMPD segment revenue for the new year is projected to grow 3 percent to 5 percent, with segment profit around $175 million.

In the fourth quarter, net earnings attributable to the company was $235 million, compared to loss of $56 million a year ago. Earnings per share were $0.96, compared to prior year's $0.22 loss.

Adjusted net earnings attributable was $450 million or $1.84 per share, compared to $367 million or $1.43 per share a year ago. The Street was looking for earnings of $1.73 per share for the quarter.

Adjusted operating earnings increased 14 percent year-over-year to $605 million, driven primarily by significant segment profit increase in GMPD, and 8 percent rise in Pharmaceutical and Specialty Solutions with positive generics program performance.

Cardinal Health reported fourth-quarter revenues of $59.9 billion, an increase of 12 percent from the prior year's $53.4 billion. Analysts expected revenues of $58.64 billion for the quarter.

Pharmaceutical and Specialty Solutions segment revenues grew 13 percent from last year to $55.6 billion, driven by brand and specialty pharmaceutical sales growth from existing customers.

The fourth-quarter revenue for GMPD segment increased 2 percent to $3.1 billion, driven by volume growth from existing customers.

In pre-market activity on the NYSE, Cardinal Health shares were gaining around 7.1 percent to trade at $109.86.

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