Cardinal Health reports Q2 results, raises fiscal year 2025 outlook

Robust demand across its pharmaceutical and specialty solutions segment was the impetus behind Cardinal Health raising its fiscal 2025 enterprise guidance, said Jason Hollar, CEO of Cardinal Health, in reporting the company’s second quarter fiscal year 2025 results.

"We delivered strong second quarter financial results while taking significant strategic and operational actions to position us for future growth," Hollar said.

The Dublin, Ohio-based company reported revenues of $55.3 billion, a decrease of 4% from the second quarter of fiscal year 2024. Second quarter revenue increased 16%, excluding the impact of the previously communicated large customer contract expiration. Second quarter GAAP operating earnings increased 9% to $549 million and GAAP diluted earnings per share were $1.65. 

Second quarter non-GAAP operating earnings increased 9% to $635 million, driven by the Pharmaceutical and Specialty Solutions segment. Non-GAAP diluted EPS increased 2% to $1.93, due to an increase in non-GAAP operating earnings and a lower share count, offset in part by an increase in interest and other expense due to financing impacts related to the recent acquisitions, Cardinal Health said.

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Hollar added, "We are also pleased to announce the closing of our acquisition of a majority position in GI Alliance. GI Alliance, along with our recently completed Integrated Oncology Network transaction in support of our Navista oncology platform, enables our continued specialty growth and delivers a greater value proposition for providers and patients."

Cardinal Health’s second quarter revenue for the pharmaceutical and specialty solutions segment decreased 4% to $50.8 billion. Second quarter revenue increased 17% excluding the impact of the customer contract expiration, driven by brand and specialty pharmaceutical sales growth from existing and new customers.

The company’s pharmaceutical and specialty solutions segment profit increased 7% to $531 million in the second quarter, driven by growth from BioPharma Solutions, including contributions from Specialty Networks and a higher contribution from brand and specialty products. This growth was partially offset by the customer contract expiration, Cardinal Health said.

[Read more: Cardinal Health launches ordering portal for cell, gene therapies]

Second quarter revenue for Cardinal Health's global medical products and distribution segment increased 1% to $3.2 billion, driven by volume growth from existing customers.

The company’s global medical products and distribution segment profit increased to $18 million in the second quarter, driven by cost optimization initiatives. The increase was partially offset by the write-off of uncollectible receivables in the WaveMark business, the company said.

Cardinal Health’s second quarter revenue for other increased 13% to $1.3 billion, driven by growth across the three operating segments: at-Home Solutions, Nuclear and Precision Health Solutions and OptiFreight Logistics.

The company shared that other segment profit increased 11% to $118 million in the second quarter, driven by the performance of optiFreight logistics and nuclear and precision health solutions.

Cardinal Health raised its fiscal 2025 guidance range for non-GAAP diluted earnings per share attributable to Cardinal Health to $7.85 to $8.00, from $7.75 to $7.90. The company's guidance now reflects the impacts of the completed acquisitions of Integrated Oncology Network and its majority stake in GI Alliance, the company noted.

The company updated fiscal year 2025 guidance for the pharmaceutical and specialty solutions segment profit to 10% to 12% growth, from 4% to 6% growth, driven by stronger organic growth within the segment and contributions from GI Alliance and to a lesser extent, ION. The company also updated its GMPD fiscal 2025 segment profit guidance to a range of $130 million to $150 million from the prior range of $140 million to $175 million, primarily reflecting the second-quarter write-off of uncollectible receivables in the WaveMark business.

Cardinal Health updated expectations for interest and other expense to a range of $200 million to $230 million, from $140 million to $170 million, driven by the advanced completion of $2.9 billion in new debt financing and foregone interest income related to acquisitions.