Cardinal Health Inc. (CAH) is a globally-integrated healthcare company that provides customized solutions for hospitals, healthcare systems, pharmacies, ambulatory surgery centers, clinical laboratories, physician offices and patients in the home.
The company generated about 90% of its revenue from its pharmaceuticals segment and 10% from its medical segment during the first quarter of 2021. In terms of geographic diversification, 97% of revenue came from the United States, with the remainder coming from international sources during the quarter.
Lackluster Performance
Cardinal Health reported fiscal third quarter revenue that rose 0.3% to $39.28 billion, missing consensus estimates by $910 million, with non-GAAP earnings of $1.53 per share, missing consensus estimate by three cents. Looking ahead, the company narrowed its FY2021 guidance to a lower-than-expected non-GAAP EPS range of $5.90 to $6.05 per share.
Analysts responded by lowering their outlooks. For instance, Baird analyst Eric Coldwell downgraded the stock to a Neutral rating, citing chronic underperformance in the pharmaceutical and medical segments with low transparency, adding that it may take years to rebuild investor confidence.
The company raised its quarterly dividend by about 1% to $0.4908 per share, which represents a 3.27% forward yield. The dividend is payable on July 15, 2021, to shareholders on record as of July 1, 2021.
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