Cardinal Health (NYSE: CAH) announced its third quarter results for fiscal year 2025, demonstrating robust operational execution and financial resilience with a revenue of $54.9 billion, flat compared to Q3 fiscal 2024. Adjusted for a previously communicated customer contract expiration, revenue increased an impressive 19% year-over-year (YoY), underscoring Cardinal Health’s strong growth trajectory despite external headwinds.
The company’s GAAP operating earnings surged by 98% to \(730 million, with GAAP diluted earnings per share (EPS) nearly doubling to \)2.10 from \(1.07 in the prior year period. More notably, non-GAAP operating earnings rose 21% to \)807 million, fueled by profit growth across all operating segments. Non-GAAP diluted EPS also increased 13% to $2.35, reflecting operational efficiency and a lower share count, partially offset by higher interest and other expenses due to financing costs from recent acquisitions.
Segment Highlights: - Pharmaceutical and Specialty Solutions generated \(50.4 billion in revenue, flat YoY but increased 20% excluding contract expiration effects. Segment profit grew 14% to \)662 million, driven by brand and specialty pharmaceutical sales, MSO platforms including GI Alliance, BioPharma Solutions, and a strong generics program. - Global Medical Products and Distribution (GMPD) segment revenue rose 2% to \(3.2 billion, with segment profit skyrocketing 77% to \)39 million attributable to cost optimization initiatives. - The “Other” segment, encompassing at-Home Solutions, Nuclear and Precision Health Solutions, and OptiFreight Logistics, saw revenue increase 13% to \(1.3 billion and segment profit grew 22% to \)134 million.
Financial Position and Outlook: - Cardinal Health’s balance sheet strengthened with total assets increasing to approximately \(49.9 billion as of March 31, 2025, up from \)45.1 billion a year earlier. - The company completed a \(375 million accelerated share repurchase program in Q3, reducing diluted weighted average shares to ~242 million, enhancing EPS metrics. - The fiscal year 2025 non-GAAP diluted EPS guidance was raised and narrowed to \)8.05 - \(8.15 from prior \)7.85 - $8.00, reflecting management confidence in continued profitability. - For fiscal 2026, Cardinal expects double-digit non-GAAP EPS growth with sustained strong segment profit growth in Pharmaceutical and Specialty Solutions and Other operating segments. GMPD segment profit is expected to be consistent with fiscal 2025 results. - Cardinal Health plans to provide further fiscal 2026 guidance updates at its Investor Day on June 12, 2025.
Strategic Developments: - Expansion of the GI Alliance into urology specialty therapeutic areas through acquisitions of Urology America and Potomac Urology, supporting physician-led practices. - Acquisition of Advanced Diabetes Supply Group to enhance at-Home Solutions capabilities. - A new agreement with GE Healthcare to manufacture and distribute Flyrcado, an innovative PET agent for coronary artery disease diagnosis. - Cardinal Health published its annual biosimilars report highlighting the decade-long positive impact on healthcare.
From a financial perspective, Cardinal demonstrated a 10% YoY gross margin improvement to $2.12 billion in Q3, indicating effective cost control and product mix enhancement. Operating expenses grew moderately by 4%, supporting increased operating earnings of 98% on a GAAP basis.
This solid earnings performance aligns with trends from previous earnings calls emphasizing operational execution and disciplined capital allocation amid a macro environment characterized by inflation pressures and global economic uncertainty. The management highlighted initiatives driving efficiency, such as cost optimization in GMPD and strategic investments in specialty pharmaceutical and at-home healthcare services.
Cardinal Health’s focus on expanding healthcare service platforms and continuous innovation, including its multi-specialty MSO growth and digital diagnostics, positions the company well for sustainable revenue and earnings growth. The raised guidance for fiscal 2025 and optimistic outlook for 2026 reflect confidence in navigating evolving healthcare demands and economic challenges.
For full details, view the original SEC filing here: https://sec.gov/Archives/edgar/data/721371/000072137125000036/a25q3_x33125xex991xnewsrel.htm
Tags: CardinalHealthQ3Results, HealthcareGrowth2025, PharmaceuticalSolutions, MedicalDistribution, FiscalOutlook2026