On Jun 3, 2013, we retained
Cardinal Health, Inc.
) at Neutral based on its fiscal third quarter 2013 earnings
Why the Retention?
Cardinal Health announced results for the reported quarter on
May 2. The company posted adjusted earnings per share from
continuing operations of $1.20, thereby beating the Zacks
Consensus Estimate of 95 cents as well as the year-ago earnings
of 94 cents per share.
Revenues in the fiscal third quarter were $24,552 million,
down 9% on a year-over-year basis, almost in line with the Zacks
Consensus Estimate of $24,635 million.
While margins are thin in the bulk pharmaceutical business,
the business mix is evolving in favor of the non-bulk segment.
Cardinal Health's generics business showed continued signs of
For fiscal 2013, Cardinal raised its forecast for adjusted
earnings per share from continuing operations to a band of $3.67
and $3.71 (from $3.42 to $3.50 earlier).
In late Apr 2013, Cardinal Health revealed that it inked a
fresh agreement to provide pharmaceutical products to a chain of
distribution facilities and retail pharmacies of
CVS Caremark Corporation
) till the middle of 2016.
However, the company has recently lost two important clients,
Express Scripts Holding Company
). Loss of contracts with Walgreens and Express Scripts has
negatively impacted revenue. However, the smaller Medical segment
is now in a stable condition.
The Zacks Consensus Estimate for fiscal 2013 has moved up by
12 cents (3.4%) to $3.62 over the last 60 days. The Zacks
Consensus Estimate for 2014 has moved down by 2 cents (0.6%) over
the same timeframe. The stock carries a Zacks Rank #3 (Hold).
CARDINAL HEALTH (CAH): Free Stock Analysis
CVS CAREMARK CP (CVS): Free Stock Analysis
EXPRESS SCRIPTS (ESRX): Free Stock Analysis
WALGREEN CO (WAG): Free Stock Analysis Report
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