Cardinal Health Second Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Cardinal Health (NYSE:CAH) will unveil its latest earnings on Tuesday, February 5, 2013. Cardinal Health offers products and services that improve the safety and productivity of healthcare providers.

Cardinal Health Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of 85 cents per share, a rise of 4.9% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 86 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 85 cents during the last month. For the year, analysts are projecting profit of $3.44 per share, a rise of 7.2% from last year.

Past Earnings Performance: Last quarter, the company beat estimates by 2 cents, coming in at net income of 81 cents a share versus the estimate of profit of 79 cents a share. It marked the fourth straight quarter of beating estimates.

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A Look Back: In the first quarter, profit rose 14.4% to $271 million (79 cents a share) from $236.8 million (68 cents a share) the year earlier, exceeding analyst expectations. Revenue fell 3.4% to $25.89 billion from $26.79 billion.

Stock Price Performance: Between November 30, 2012 and January 30, 2013, the stock price had risen $4.23 (10.5%), from $40.45 to $44.68. The stock price saw one of its best stretches over the last year between January 8, 2013 and January 18, 2013, when shares rose for nine straight days, increasing 5.2% (+$2.20) over that span. It saw one of its worst periods between December 20, 2012 and December 28, 2012 when shares fell for six straight days, dropping 3.8% (-$1.59) over that span.

Wall St. Revenue Expectations: Analysts are projecting a decline of 9% in revenue from the year-earlier quarter to $24.63 billion.

Key Stats:

This upcoming earnings announcement will be a chance to build on positive earnings momentum over the last three quarters. Net income rose 35.5% in the third quarter of the last fiscal year and 16.8% in the fourth quarter of the last fiscal year before increasing again in the first quarter.

On the top line, the company is looking to get back on the right track after last quarter’s drop snapped a string of revenue increases. Revenue rose 6.7% in the second quarter of the last fiscal year, 3.2% in the third quarter of the last fiscal year and 0%in the fourth quarter of the last fiscal year before dropping in the first quarter.

Analyst Ratings: With nine analysts rating the stock a buy, none rating it a sell and two rating the stock a hold, there are indications of a bullish stance by analysts.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.23 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 1.24 in the fourth quarter of the last fiscal year to the last quarter driven in part by an increase in liabilities. Current liabilities increased 3.5% to $14.67 billion while assets rose 2.8% to $18.01 billion.

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