Cardinal Health Adds to Warnings Over Drug Pricing
October 31 2016 - 8:29AM
Dow Jones News
By Austen Hufford
Cardinal Health Inc. became the latest drug distributor to warn
that the slowing pace of drug-price increases would hurt
results.
Chief Executive George Barrett said Monday that "short-term
headwinds, particularly around pharmaceuticals, are quite
challenging." Cardinal lowered its profit guidance for the year,
citing generic pharmaceutical pricing and reduced levels of branded
drug price increases.
The company now expects generic drug prices to fall in the
mid-to-high single digits while expecting branded drugs to increase
7% to 9% in the year. It now forecasts annual earnings adjusted
earnings per share of between $5.40 to $5.60, down from $5.48 to
$5.73 previously.
Shares of many drugmakers, wholesale distributors and
pharmacy-benefit managers were battered Friday as evidence emerged
that drug companies aren't increasing prices as sharply as in
previous years. Cardinal shares were inactive in premarket trading
Monday after falling sharply on Friday along with the rest of the
sector.
For the period ended Sept. 30, Cardinal Health reported a profit
of $309 million, or 96 cents a share, down from $383 million, or
$1.15 a share, a year prior. Excluding certain items, per-share
earnings fell to $1.24 from $1.38.
Revenue increased 14% to $32.04 billion.
Analysts polled by Thomson Reuters expected per-share profit of
$1.21 and revenue of $31.04 billion.
Pharmaceutical segment revenue climbed 15% to $28.80 billion,
while medical segment revenue grew 14% to $3.3 billion.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
October 31, 2016 08:14 ET (12:14 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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