Cardinal Health Inc.'s (CAH) fiscal second-quarter earnings rose 22% on growth in its pharmaceuticals segment and higher margins, though the medical business posted weaker income.
The second-biggest drug distributor in the U.S. behind McKesson Corp. (MCK) has continued to report stronger revenue, partly thanks to acquisitions. Cardinal has been acquisitive amid efforts to reduce its dependence on major customers such as CVS Caremark Corp. (CVS) and drug-store chain Walgreen Co.(WAG). Its more recent purchases include a diverse range of businesses, including China's largest pharmaceutical importer, a distributor of nursing-home supplies and a specialty pharmaceutical services company.
For the quarter ended Dec. 31, Cardinal Health reported a profit of $262 million, or 75 cents a share, up from $215.4 million, or 61 cents a share, a year earlier. Excluding acquisition-related costs and other items, earnings from continuing operations rose to 81 cents from 73 cents. Revenue increased 6.7% to $27.08 billion.
Analysts polled by Thomson Reuters most recently forecast earnings of 73 cents on revenue of $26.89 billion.
Gross margin rose to 4.1% from 3.9%.
The company's pharmaceutical segment's revenue grew 6.5%, and its profit rose 30% on acquisitions and increased volume from existing and new customers. The smaller medical business reported 9.4% higher revenue, but its profit declined 18% on commodity price pressure and increased investments in information systems.
Shares closed Wednesday at $43.08 and were inactive premarket. The stock is down 1.7% over the past three months.
-By Ben Fox Rubin, Dow Jones Newswires; 212-416-3108; firstname.lastname@example.org;