Cardinal Health lifts profit outlook on specialty drug momentum

Cardinal Health (CAH), the Dublin, Ohio-based drug distributor, raised its full-year profit outlook above analyst expectations after delivering a stronger-than-expected fourth quarter, buoyed by sustained demand for specialty and branded pharmaceuticals.

The company forecast adjusted earnings per share of between $12.40 and $12.60 for fiscal 2027, comfortably ahead of the $12.04 consensus estimate compiled by LSEG. Shares rose more than four per cent in premarket trading.

Quarterly adjusted earnings of $2.91 per share beat estimates of $2.42, though total fourth-quarter revenue of $63.67bn fell short of the $65.03bn analysts had anticipated, rising six per cent year over year.

Cardinal Health is among the drug distributors capitalising on rising demand for biosimilars and high-margin medicines used to treat complex conditions including cancer, rheumatoid arthritis and autoimmune diseases. Its largest unit by revenue, Pharmaceutical and Specialty Solutions, posted a six per cent increase in sales to $55.4bn in the quarter.

The company also outlined $1bn in share repurchases planned for fiscal 2027.

Last month, Cardinal Health completed two tuck-in acquisitions totalling approximately $360mn, purchasing AdaptHealth's diabetes health business and medical supply provider Strive Medical. The AdaptHealth deal expanded the company's direct-to-consumer distribution platform for diabetes supplies, including continuous glucose monitors, while the Strive transaction strengthened its position in the urology market.