Get All Access for FREEMarket News & Research,
Live Transcripts & Audio,
and a whole lot more…
$CAH has agreed to sell its China business to Shanghai Pharmaceuticals Holding Co., Ltd. for $1.2Bil. The sale includes the company’s pharmaceutical and medical products distribution business in China. The transaction is expected to close by the end of Cardinal Health's fiscal year.
Preliminary 2Q18 Results: $MDT worldwide revenue declined 4% to approx. $7.05Bil, with the decline driven by the company's divestiture of its Patient Care, Deep Vein Thrombosis and Nutritional Insufficiency businesses to $CAH. The company expects the impact of Hurricane Maria to be approx. $0.03 to non-GAAP EPS for 2Q18.
Healthcare services company $CAH has appointed Mike Kaufmann as CEO, to succeed George Barrett. Kaufmann, who currently serves as CFO, will also join the company’s board of directors, effective January 1, 2018. Jorge Gomez will succeed Kaufmann as CFO, while Barrett will continue to serve as executive chairman of the BoD until November 2018.
$CAH's revenue from the Medical segment for 1Q18 grew 14% from last year. This was primarily driven by contributions from acquisitions and, to a lesser extent, new and existing customers. Segment profit rose 1% on contributions from acquisitions, which were mostly offset by the reduced contribution from a Veterans Affairs contract.
$CAH's revenue from the Pharmaceutical segment for 1Q18 rose 1% from last year. This was due to sales growth from specialty and pharmaceutical distribution customers, which was partially offset by the previously announced May 2017 expiration of a large, mail-order customer contract.
$CAH reported a 62% plunge in 1Q18 earnings due to restructuring costs from regaining direct distribution of self-manufactured surgeon gloves and higher intangible assets amortization. Net income fell to $117MM or $0.36 per share from $310MM or $0.96 per share last year. Revenue rose 2% to $32.64Bil. Non-GAAP EPS decreased 12% to $1.09.
In FY18, $MDT expects constant currency revenue growth to be in the range of 4% to 5%. Medtronic sees full-year non-GAAP diluted EPS to grow by 9-10%. Fiscal year guidance does not include the impact of the divestiture of a portion of its Patient Monitoring and Recovery division to $CAH, expected to close in 2Q18.
$CAH sees to incur tax and some reserve adjustments in FY17 but not in FY18. Cardinal Health also expects incremental expenses over the next couple of years due to the planned Pharma Distribution IT refresh project rollout, particularly next year.
3Q17 revenue for the Pharmaceutical segment rose 3% to $28.4Bil at $CAH, due to the performance from the Specialty business and growth from Pharmaceutical Distribution customers. Medical segment revenue was up 9% to $3.4Bil. CAH now sees FY17 non-GAAP EPS from continuing ops at the bottom of its previous guidance range of $5.35-5.50.
$CAH's revenue inched 4% up to $31.8Bil in 3Q17, as the health care services company's net income slipped 1% to $381MM from last year's $386MM. Earnings rose 3% to $1.20 per diluted share from last year's $1.17 a share, benefitted from a lower effective tax rate and fewer weighted average shares outstanding.
$CAH expects generic deflation to moderate to mid-single digits in FY18 but this deflation is still a headwind for the Pharmaceutical segment for the year. This, combined with certain discrete items could result in an estimated Pharmaceutical segment profit decline in the high-single digits versus FY17.
For FY18, $CAH expects adjusted EPS to be flat to down mid-single digits. $CAH also expects a significant increase in the Medical segment's profit. $CAH believes certain company-specific discrete items will have a negative impact on EPS of at least $0.50. For FY19, $CAH expects adjusted EPS to grow at least high-single digits vs. FY18.