Healthcare services provider Cardinal Health, Inc. (CAH) reported Thursday a profit for the third quarter that grew from last year, as medical segment revenues and better margins helped to offset falling pharmaceutical sales.
Adjusted earnings per share from continuing operations matched analysts' expectations, while quarterly revenues declined nine percent and missed their estimates by a whisker.
The company also raised earnings outlook for the full-year 2013, citing a tax benefit from a third-quarter tax settlement.
Additionally, the board approved a 10 percent increase in quarterly dividend to $0.3025 per share, or $1.21 per share on an annualized basis, payable on July 15 to shareholders of record at close of business on July 1, 2013.
"We delivered another solid performance in our fiscal third quarter. Both our Pharmaceutical and Medical segments reported double-digit profit growth," Chairman and CEO George Barrett said in a statement.
Dublin, Ohio-based Cardinal Health reported net earnings from continuing operations grew to $346 million or $1.00 per share from $332 million or $0.95 per share in the year-ago quarter.
Excluding items, adjusted earnings from continuing operations were $412 million or $0.95 per share, compared to $327 million or $0.94 per share in the prior-year quarter.
On average, 16 analysts polled by Thomson Reuters expected the company to report earnings of $0.95 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter declined 9 percent to $24.55 billion from $26.92 billion in the same quarter last year, and missed thirteen Wall Street analysts' consensus estimate of $24.72 billion by a whisker.
Quarterly revenue for the Pharmaceutical segment declined 10 percent from the prior-year period to $22.07 billion, due to the non-renewal of the Express Scripts Holdings Co. (ESRX) contract as well as conversions from branded pharmaceuticals to lower-priced generics. This was partly offset by revenues from new customers.
Medical segment revenues grew 3 percent from last year to $2.48 billion, reflecting the benefits of acquisitions, partially offset by one fewer sales day.
Looking ahead to fiscal 2013, Cardinal Health raised its outlook for adjusted earnings from continuing operations to a range of $3.67 to $3.71 per share from the prior guidance of $3.42 to $3.52 per share. Street is currently looking for full-year 2013 earnings of $3.50 per share.
"Our organization is successfully innovating and adapting our business lines and portfolio to an evolving market, with a focus on establishing a strategic edge in areas of higher growth. This was highlighted during the quarter with the acquisition of AssuraMed which will enable us to follow the care of patients to the home," Barrett added.
CAH closed Wednesday's regular trading session at $43.94, down $0.28 on a volume of 4.50 million shares. In the past 52-week period, the stock has been trading in a range of $36.91 to $47.23.
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