Cardinal Health ((CAH)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Cardinal Health’s latest earnings call painted a picture of robust financial health and growth, with significant revenue and profit increases across all segments. The company demonstrated strong cash flow and shareholder returns, and even raised its EPS guidance. However, concerns were raised regarding tariff costs and increased interest expenses, which could pose challenges in the coming quarters.
Strong Start to Fiscal Year 2026
Cardinal Health kicked off Fiscal Year 2026 with impressive double-digit profit growth across all five operating segments. This robust performance underscores the company’s strong operating momentum and broad-based success.
Pharmaceutical and Specialty Solutions Segment
The Pharmaceutical and Specialty Solutions segment was a standout performer, with first-quarter revenue surging by 23% to $59 billion. This growth was fueled by brand and specialty pharmaceutical sales, leading to a 26% increase in segment profit to $667 million.
Increased EPS Guidance
Reflecting its confidence in ongoing growth, Cardinal Health raised its EPS guidance for the full year to a range of $9.65 to $9.85. This represents a 17% to 20% increase from the previous year, signaling strong future prospects.
Record Revenue Growth
The company achieved record revenue growth, with total revenue climbing 22% to $64 billion. This growth was driven by all five operating segments, showcasing Cardinal Health’s comprehensive strength.
Strong Performance in Other Segments
The ‘Other’ segment also delivered impressive results, with first-quarter revenue up 38% to $1.6 billion and segment profit soaring by 60% to $166 million.
Cash Flow and Shareholder Returns
Cardinal Health generated $1.3 billion in adjusted free cash flow and returned $500 million to shareholders, ending the quarter with a robust cash position of $4.6 billion.
Tariff Costs Impact
The company faced a slight headwind from net tariff costs in the GMPD segment during Q1, with expectations of a larger impact in the second quarter.
Interest and Other Expenses
Interest and other expenses rose by $43 million to $70 million due to financing costs related to acquisitions, highlighting an area of concern for future financial planning.
Forward-Looking Guidance
Looking ahead, Cardinal Health is optimistic about its growth trajectory, bolstered by the acquisition of Solaris Health, which is expected to contribute significantly to the Pharmaceutical segment’s profit growth. The company also increased its adjusted free cash flow guidance to $3 billion to $3.5 billion, reflecting confidence in sustained demand and strategic execution.
In conclusion, Cardinal Health’s earnings call conveyed a positive outlook with strong financial performance and strategic growth initiatives. Despite challenges such as tariff costs and rising interest expenses, the company’s raised EPS guidance and robust cash flow position it well for continued success.