Cardinal Health reports revenue growth in Q2

Better than expected performance in the pharmaceutical segment and medical results in-line with its "prior commentary" drove Cardinal Health's second quarter revenues to $51.5 billion, an increase of 13% from the same period last year.

Second quarter GAAP operating loss was $119 million due to a non-cash, pre-tax goodwill impairment of $709 million related to the medical segment.

GAAP diluted loss per share was 50 cents, primarily due to this impairment, net of tax effects. Second quarter non-GAAP operating earnings of $467 million were in-line with the second quarter of last year.  Non-GAAP diluted earnings per share increased 4% to $1.32, due to lower interest expense and a lower share count, partially offset by a higher non-GAAP effective tax rate, the company said.

"Our second quarter results demonstrate continued momentum against our plans, led by better-than-expected performance in the pharmaceutical segment and medical results in-line with our prior commentary," said Jason Hollar, CEO of Cardinal Health. "With the first half of fiscal year 2023 behind us, we are pleased to raise our full year non-GAAP EPS guidance and outlook for the pharmaceutical segment. In the medical segment, we remain confident in our Medical Improvement Plan, including the actions we are taking to mitigate supply chain inflation and drive improved performance."

[Read more: Cardinal Health teams up with Palantir to deliver a clinically integrated supply chain solution]

Cardinal's second-quarter revenue for the pharmaceutical segment increased 15% to $47.7 billion, driven by brand and specialty pharmaceutical sales growth from existing and net new customers.

Pharmaceutical segment profit increased 9% to $464 million in the second quarter, driven by a higher contribution from brand and specialty products and generics program performance. This increase was partially offset by inflationary supply chain costs, Cardinal Health said.

Second-quarter revenue for the medical segment decreased 7% to $3.8 billion, driven by lower products and distribution sales, including PPE pricing and volumes. Growth in at-Home Solutions partially offset this decline, the company said.

Cardinal Health's medical segment profit decreased 66% to $17 million in the second quarter, primarily due to lower products and distribution volumes and net inflationary impacts. The decrease was partially offset by an improvement in PPE margins, Cardinal Health said.

[Read more: Cardinal Health posts revenue growth in Q1]

Cardinal Health updated its fiscal year 2023 guidance range for non-GAAP diluted earnings per share to $5.20 to $5.50, from $5.05 to $5.40.

This guidance includes an update to fiscal year 2023 pharmaceutical segment profit outlook to 4% to 6.5% growth, from 2% to 5% growth. Additionally, the company updated expectations for fiscal year 2023 interest and other to $115 million to $130 million, from $140 million to $160 million.