Cardinal Health profit slides 26 percent after August spinoff, but company lifts 2010 estimate

Cardinal Health 2Q profit falls, outlook raised

DUBLIN, Ohio — Cardinal Health Inc. said Thursday its profit fell 26 percent in the fiscal second quarter after it spun off its medical technology business, but the drug distributor boosted its full-year profit guidance, sending it shares to a new high.

Profit for the quarter ended in December fell to $234.5 million, or 65 cents per share, from $316.5 million, or 89 cents per share, a year ago. Cardinal Health spun off CareFusion Corp. at the end of August.

Excluding discontinued operations and one-time items, adjusted income totaled 57 cents per share.

Revenue rose 3 percent to $24.92 billion from $24.12 billion.

The results topped estimates of analysts surveyed by Thomson Reuters, who expected income of 46 cents per share and $24.77 billion in revenue.

Quarterly pharmaceutical segment revenue grew 3 percent to $22.7 billion. Sales to non-bulk customers grew 7 percent to $11.7 billion, while sales to bulk customers fell 1 percent to $11 billion. Revenue from the company’s medical segment rose 9 percent to $2.2 billion as sales to current customers increased.

Cardinal Health raised its profit forecast for the fiscal year ending in June, citing its results to date and the “current environment.” It now expects to earn $2.08 to $2.18 per share, up from $1.90 to $2 per share. Analysts were forecasting $2.03 per share and $99.21 billion in revenue, on average.

In afternoon trading, Cardinal Health shares advanced $1.64, or 5.2 percent, to $32.95. Earlier the stock climbed as high as $33.52.

Fellow drug distributor AmerisourceBergen reported Tuesday that its fiscal 2010 first-quarter profit jumped 36 percent to beat expectations on a mix of new business and generic drug sales. The same day, McKesson Corp. posted quarterly results in line with analysts’ expectations on strong demand for its flu vaccines.

Like Cardinal Health, both companies also raised their full-year earnings forecasts.