(By Balaseshan) Cardinal Health Inc. (NYSE: CAH) reported a 15% increase in quarterly earnings on strong segments growth and lower costs of products sold despite a decline in revenue.
Profit from continuing operations grew 15% to $272 million for the first quarter. Adjusted earnings from continuing operations rose to $281 million or $0.81 per share from $256 million or $0.73 per share.
Revenue declined 3% to $25.89 billion.
Analysts, on average, polled by Thomson Reuters had expected a profit of $0.79 per share on revenue of $26.35 billion for the first quarter.
Revenue for the Pharmaceutical segment declined 4% to $23.5 billion, primarily due to brand-to-generic conversions. Segment profit grew 10% to $400 million, on strong performance of generic programs.
Revenue for the Medical segment increased 1% to $2.4 billion, on last year's acquisition of Futuremed and growth in its preferred products. Segment profit fell 6% to $74 million, primarily due to the volume softness and the net impact of the information systems-related issues.
Return on equity rose to 17.3% from 16.4%, while adjusted return on equity increased to 17.9% from 17.7%. Net debt to capital for the quarter declined to 7% from 8%.
Looking ahead into the fiscal 2013, the company reaffirmed its adjusted earnings from continuing operations guidance of $3.35 to $3.50 per share, while Street predicts $3.45 per share.
In a separate release, the company said its board has approved a 16% increase in quarterly dividend to $0.275 per share, or $1.10 per share on an annualized basis. The dividend is payable on Jan. 15, 2013, to shareholders of record at the close of business on Jan. 2, 2013.
"The just-announced decision to increase the dividend by another 16% underscores our commitment to a differentiated dividend. This adds to the 10.5% increase realized in July, bringing our anticipated annualized payout ratio to over 30% of our fiscal 2013 outlook for non-GAAP EPS," said George Barrett, chief executive of CAH.
CAH closed Friday's regular session at $40.43. The stock has been trading between $36.91 and $46.23 for the past 52 weeks.