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Cardinal Health Q1 Results Top Estimates; Reaffirms FY19 Profit View


Cardinal Health (CAH) Thursday reported a surge in first-quarter profit, reflecting a gain of $508 million related to the naviHealth divestiture. Both adjusted earnings per share and revenues topped analysts' expectations. The company reaffirmed profit outlook for fiscal 2019.

"We are pleased that the first quarter provided a solid start to fiscal year 2019. Operating performance came in as expected, and we are on track in executing on our strategic initiatives to deliver increased value to our shareholders, our customers and their patients," said Mike Kaufmann, CEO of Cardinal Health.

In the pre-market, CAH is currently trading at $58.37, up $4.72 or 8.80 percent.

The board approved new $1 billion share repurchase authorization and declared quarterly dividend of $0.4763 per common share.

The company reaffirmed its fiscal year 2019 non-GAAP earnings per share guidance in a range of $4.90 to $5.15. Analysts expect annual earnings of $5.01 per share.

Net earnings attributable to the company for the first quarter fiscal year 2019 surged to $593 million or $1.94 per share from $115 million or $0.36 per share last year.

GAAP earnings per share from continuing operations increased 439 percent to $1.94.

Non-GAAP earnings per share increased 18 percent to $1.29 from $1.09 last year. Analysts polled by Thomson Reuters expected the company to report earnings of $1.08 per share for the quarter. Analysts' estimates typically exclude special items.

The company also reported growth in GAAP operating earnings of 211 percent to $816 million and a decrease in non-GAAP operating earnings of 11 percent to $542 million. GAAP operating earnings included a gain of $508 million or $378 million after-tax related to the naviHealth divestiture.

Quarterly revenues were $35.21 billion, an increase of 8 percent from $32.64 billion last year. Analysts expected revenue of $33.65 billion for the quarter.

First quarter revenue for the Pharmaceutical segment increased 9 percent to $31.4 billion due to sales growth from Pharmaceutical Distribution and Specialty Solutions customers, partially offset by the divestiture of the company's China distribution business.

First quarter revenue for the Medical segment increased 2 percent to $3.8 billion, which was driven primarily by new and existing customers.

The Cardinal Health board of directors approved a quarterly dividend of $0.4763 per share. The dividend will be payable on January 15, 2019 to shareholders of record at the close of business on January 2, 2019.

The company said it recently completed a $600 million share repurchase program, and this week, the board of directors approved a three-year authorization to repurchase up to an additional $1 billion of Cardinal Health common shares, which will expire on December 31, 2021. The company is now authorized to repurchase up to $1.3 billion of its common shares.

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