Cardinal Health Earnings: Cost Decline Helps Margin as Profit Grows

S&P 500 (NYSE:SPY) component Cardinal Health Inc. (NYSE:CAH) reported its results for the fourth quarter. Cardinal Health offers products and services that improve the safety and productivity of healthcare providers.

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Cardinal Health Inc. Earnings Cheat Sheet

Results: Net income for Cardinal Health Inc. rose to $236 million (68 cents per share) vs. $202.7 million (57 cents per share) in the same quarter a year earlier. This marks a rise of 16.4% from the year-earlier quarter.

Revenue: Remained constant at $26.76 billion.

Actual vs. Wall St. Expectations: Cardinal Health Inc. reported adjusted net income of 73 cents per share. By that measure, the company beat the mean estimate of 72 cents per share. Analysts were expecting revenue of $26.71 billion.

Quoting Management: “We finished our fiscal year with a strong fourth quarter, growing our non-GAAP EPS by 22 percent,” said George Barrett, chairman and chief executive officer of Cardinal Health. “Our Pharmaceutical segment continued its strong momentum, and, as expected, our Medical segment finished the year with profit growth in the fourth quarter and is well-positioned as we begin FY 2013. “Overall, fiscal 2012 was another strong year, meeting virtually all of our financial goals, including revenues, margin growth, operating earnings, EPS and cash flow. It was also a year in which we made great strides on our strategic priorities – including expansion of our retail independent customer base, improved generic contribution, build out of our Positron Emission Tomography capabilities, accelerating penetration of our specialty solutions, growth in preferred medical products, expansion of our ambulatory franchise and excellent growth in China.”

Key Stats:

The company has now seen its net income rise for three quarters in a row. In the third quarter, net income rose 35.5% and in the second quarter, the figure rose 21.6%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 6 cents in the third quarter, by 5 cents in the second quarter, and by one cent in the first quarter.

Gross margins were up 0.3 percentage point to 4.2%. This growth appeared to be driven by falling costs, as the figure went down 0.4% from the prior-year quarter while revenue rose 0%.

Over the last five quarters, revenue has increased 5.8% on average year-over-year. The biggest increase came in the first quarter, when revenue rose 9.6% from the year-earlier quarter.

Looking Forward: Expectations for the first quarter of the next fiscal year have not changed from 85 cents. The average estimate for the fiscal year is $3.20 per share, a rise from $3.18 ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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