Cardinal Health Again Trims 2017 Profit Forecast
February 07 2017 - 8:20AM
Dow Jones News
By Joshua Jamerson
Cardinal Health Inc. cut its profit forecast for its current
year amid a drop in generic drug prices, which the company says is
pressuring the bottom line in its pharmaceutical segment.
The company had already lowered its outlook in October when it
warned that the slowing pace of branded drug-price increases and
lower pricing for generics was denting results, with Chief
Executive George Barrett calling the company's operating
environment "very challenging" as drugmakers react to criticism of
high drug prices.
For Cardinal Health's year ending in June, the company now
projects adjusted earnings from continuing operations in a range of
$5.35 to $5.50 a share from an earlier outlook of $5.40 to $5.60 a
share. The company said it expects high-single digit deflation in
generic drug prices for its full year.
Cardinal and other distributors act as middlemen between
drugmakers and pharmacies. Their contracts with branded
pharmaceutical companies often allow them to benefit from rising
drug prices, but as some branded drugmakers rein in increases the
benefit to distributors like Cardinal gets squeezed.
For the company's second quarter, which ended in December,
pharmaceutical segment revenue rose 5% to $29.74 billion, though
segment profit fell 14%. Meanwhile, while medical segment revenue
grew 8% to $3.41 billion, and profit in the segment jumped 50%.
In all, Cardinal Health reported net income of $324 million, or
$1.02 a share, compared with $326 million, or 98 cents a share, a
year prior. Excluding certain items, per-share earnings rose to
$1.34 from $1.30.
Revenue increased 5% to $33.15 billion. Analysts polled by
Thomson Reuters expected per-share profit of $1.23 and revenue of
$33.55 billion.
Shares, which have climbed 15% in the past three months but are
down 0.8% from a year ago, were inactive premarket.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
February 07, 2017 08:05 ET (13:05 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Cardinal Health (NYSE:CAH)
Historical Stock Chart
From Aug 2024 to Sep 2024
Cardinal Health (NYSE:CAH)
Historical Stock Chart
From Sep 2023 to Sep 2024