On August 14, 2024, Cardinal Health Inc (CAH, Financial) released its 8-K filing for the fourth quarter and fiscal year 2024, showcasing robust financial performance and an optimistic outlook for fiscal year 2025.
Cardinal Health is one of three leading pharmaceutical wholesalers in the U.S., engaged in sourcing and distributing branded, generic, and specialty pharmaceutical products to pharmacies, hospitals, and healthcare providers. Along with Cencora and McKesson, the three comprise well over 90% of the U.S. pharmaceutical wholesale industry. Cardinal Health also supplies medical-surgical products and equipment to healthcare facilities in North America, Europe, and Asia.
Q4 and FY 2024 Financial Highlights
Cardinal Health Inc (CAH, Financial) reported fourth-quarter revenue of $59.9 billion, a 12% increase from the prior year, surpassing the analyst estimate of $50.53 billion. GAAP operating earnings were $401 million, and GAAP diluted EPS was $0.96. Non-GAAP operating earnings increased 14% to $605 million, while non-GAAP diluted EPS surged 29% to $1.84, significantly exceeding the analyst estimate of $1.26.
For the full fiscal year 2024, revenues reached $226.8 billion, an 11% increase from fiscal year 2023. GAAP operating earnings were $1.2 billion, and GAAP diluted EPS was $3.45. Non-GAAP operating earnings rose 16% to $2.4 billion, and non-GAAP diluted EPS increased 29% to $7.53, compared to the annual estimate of $6.21.
Segment Performance
The Pharmaceutical and Specialty Solutions segment reported a 13% increase in fourth-quarter revenue to $55.6 billion, driven by brand and specialty pharmaceutical sales growth. Segment profit increased 8% to $482 million, primarily due to positive generics program performance.
The Global Medical Products and Distribution segment saw a 2% increase in fourth-quarter revenue to $3.1 billion, driven by volume growth from existing customers. Segment profit surged to $47 million from $7 million in the prior year, reflecting improvements in net inflationary impacts and mitigation initiatives.
Operational Achievements and Challenges
Cardinal Health Inc (CAH, Financial) achieved record operating cash flow and adjusted free cash flow of $3.8 billion and $3.9 billion, respectively, for fiscal year 2024. These achievements underscore the company's strong operational execution and strategic progress.
"Fiscal 2024 marked a year of strong operational execution and record financial results, delivered in tandem with key strategic progress in the portfolio," said Jason Hollar, CEO of Cardinal Health.
However, the company faces challenges, including ongoing inflationary pressures and the expiration of a significant customer contract with OptumRx, which is expected to impact revenue in fiscal year 2025.
Financial Metrics and Analysis
| Metric | Q4 FY24 | Q4 FY23 | FY24 | FY23 |
|---|---|---|---|---|
| Revenue | $59.9 billion | $53.4 billion | $226.8 billion | $205.0 billion |
| GAAP Operating Earnings | $401 million | $111 million | $1.2 billion | $752 million |
| Non-GAAP Operating Earnings | $605 million | $530 million | $2.4 billion | $2.1 billion |
| GAAP Diluted EPS | $0.96 | $(0.22) | $3.45 | $1.26 |
| Non-GAAP Diluted EPS | $1.84 | $1.43 | $7.53 | $5.85 |
Outlook for Fiscal Year 2025
Cardinal Health Inc (CAH, Financial) has raised its fiscal year 2025 non-GAAP EPS guidance to $7.55 to $7.70, from at least $7.50. The company also updated its Pharmaceutical and Specialty Solutions segment profit growth outlook to 1% to 3% growth, from at least 1% growth.
In conclusion, Cardinal Health Inc (CAH, Financial) has demonstrated strong financial performance in Q4 and FY 2024, driven by revenue growth and operational efficiency. Despite facing challenges, the company remains optimistic about its future prospects, as evidenced by its raised guidance for fiscal year 2025.
Explore the complete 8-K earnings release (here) from Cardinal Health Inc for further details.
