What happened
Cardinal Health, Inc. (NYSE: CAH) lifted first-quarter revenue 5% to $67.5 billion and raised full-year non-GAAP EPS guidance.
That sets a higher bar for fiscal 2027 and shows the year started ahead of last year.
GAAP operating earnings rose 13% to $753 million. Non-GAAP operating earnings rose 17% to $1.0 billion, and net earnings attributable to Cardinal Health, Inc. rose to $554 million from $450 million.
GAAP diluted EPS increased to $2.38.
Non-GAAP diluted EPS increased 28% to $3.26.
The company said that increase reflected higher operating earnings, a lower share count and a lower effective tax rate.
Gross margin increased to $2.6 billion from $2.32 billion.
Cardinal Health also said it completed a $500 million share repurchase program in the quarter.
Key numbers
| Metric | Latest | Change | Source |
|---|---|---|---|
| First quarter revenue | $67.5 billion | from $64.0 billion, +5.0% | SEC 8-K news release |
| GAAP operating earnings | $753 million | from $668 million, +13.0% | SEC 8-K news release |
| Non-GAAP operating earnings | $1.0 billion | from $857 million, +17.0% | SEC 8-K news release |
| Fiscal 2027 non-GAAP EPS guidance | $12.80 to $13.00 | SEC 8-K news release | |
| Pharmaceutical and Specialty Solutions revenue | $62.6 billion | from $59.2 billion, +6.0% | SEC 8-K news release |
| Global Medical Products and Distribution segment profit | $33 million | from $46 million, -28.0% | SEC 8-K news release |
Read more: Cardinal Health (CAH) company research
Why it matters
OptimistFi has argued that Cardinal Health can create value if scale in regulated drug and medical-products distribution keeps volume moving and PSS mix and GMPD execution turn thin spreads into cash earnings.
This filing is mixed against that view.
Pharmaceutical and Specialty Solutions revenue rose to $62.6 billion from $59.2 billion a year earlier, driven by brand and specialty pharmaceutical sales growth from existing customers.
PSS segment profit increased to $783 million from $667 million, mainly from brand and specialty products and positive generics program performance.
The segment margin improved to 1.25% from 1.13%.
Global Medical Products and Distribution was the offset.
Revenue was about flat at $3.2 billion, with growth in Cardinal Health Brand offset by lower distribution revenue.
Segment profit fell to $33 million from $46 million, reflecting unfavorable distribution and foreign exchange impacts that were partly offset by Cardinal Health Brand.
Its margin narrowed to 1.03% from 1.44%.
Other revenue rose to $1.8 billion from $1.6 billion.
Segment profit climbed to $193 million from $166 million, driven by growth across Nuclear and Precision Health Solutions, at-Home Solutions and OptiFreight Logistics.
That unit's margin improved to 10.94% from 10.12%.
Cardinal Health now expects fiscal 2027 non-GAAP EPS of $12.80 to $13.00, above its prior $12.40 to $12.60 range.
The updated range implies 17% to 19% growth from the FY26 ex-tariff refund baseline and 14% to 15% growth from reported FY26 results.
The company also lowered non-GAAP effective tax rate guidance to 18.5% to 19.5% and cut diluted weighted average shares guidance to 231 million to 232 million.
It said that reflects the timing of the accelerated share repurchase.
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Where the mix moved
Cardinal Health also said it entered a binding letter of intent to renew its pharmaceutical distribution agreements with CVS Health.
The company said that step reinforces a long-standing strategic relationship and supports continued volume growth within Pharmaceutical and Specialty Solutions.
It is also the clearest dated operating step after the quarter's results because it points to the volume side of the core business.
Cash and balance sheet
Cash from operations climbed to $1.4 billion from $973 million.
Adjusted free cash flow reached $1.58 billion from $1.28 billion.
Net cash used in financing activities was $742 million.
Cash and equivalents were $5.26 billion at Sept. 30, up from $4.86 billion at June 30.
Current assets totaled $40.99 billion, and current liabilities were $46.33 billion.
Total shareholders deficit was $2.87 billion.
What's next
Cardinal Health expects to complete the acquisition of AdaptHealth's Diabetes Health business in Q3 of fiscal 2027.
It will also host a webcast today at 8:30 a.m. ET to discuss the quarter and outlook.
The next dated check is whether the AdaptHealth closing stays on schedule, because a timely close would add another portfolio move to the story.
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Sources
- SEC 8-K news release — Exhibit 99.1 with first-quarter fiscal 2027 results, guidance, segment data and recent highlights
- SEC 8-K current report — Current report announcing the earnings release and webcast notice
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Originally published on OptimistFi, evidence-first equity research. More at optimistfi.com.
