Cardinal Health Earnings Lift Guidance on Specialty Drugs
Cardinal Health earnings raised full-year EPS guidance to $12.40 to $12.60 on specialty drug strength, likely prompting repositioning into specialty names.
KEY TAKEAWAYS
- Company raised FY2027 non-GAAP EPS guidance to $12.40 to $12.60 above analyst models.
- Q4 non-GAAP EPS was $2.91 and included a $0.31 IEEPA tariff-refund benefit.
- Management cited sustained specialty-drug demand as the principal driver of the upbeat outlook.
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Cardinal Health reported mixed fourth-quarter results on Aug. 11, 2026, with performance boosted by a one-time IEEPA tariff refund. The company issued fiscal 2027 non-GAAP earnings per share (EPS) guidance above analyst expectations, citing sustained demand for specialty drugs.
Mixed Fourth-Quarter Results
The company said in a press release that fourth-quarter revenue rose 6% to $63.7 billion. GAAP diluted EPS increased 70% year over year to $1.70, while non-GAAP diluted EPS rose 40% to $2.91. The adjusted profit included a one-time $0.31 per share benefit from an IEEPA tariff refund in the Global Medical Products Distribution (GMPD) segment, which added $100 million to net operating profit.
By segment, Pharmaceutical and Specialty Solutions revenue grew 6% to $58.8 billion, with profit climbing 21% to $645 million. GMPD revenue declined 2% to $3.1 billion, but its profit rose to $150 million, largely reflecting the tariff refund. Other revenue increased 7% to $1.7 billion, and Other segment profit rose 14% to $183 million.
FY2027 Guidance and Capital Returns
Cardinal Health provided fiscal 2027 non-GAAP EPS guidance of $12.40 to $12.60, implying 13% to 15% growth and exceeding analyst models centered near $12.04 per share. Management attributed the outlook to sustained specialty-drug demand and signaled revenue growth across its main business lines.
For fiscal 2026, the company reported revenue of $254.2 billion, up 14% year over year. GAAP diluted EPS was $7.23, and non-GAAP diluted EPS was $11.26, or $10.95 excluding the tariff refund recognition. Operating cash flow totaled $5.2 billion, with adjusted free cash flow of $5.0 billion.
The company completed $350 million in incremental share repurchases during the quarter, bringing total buybacks for fiscal 2026 to $1.4 billion. The board approved a new $5.0 billion incremental share-repurchase authorization, emphasizing continued capital returns.
