(By Balaseshan) Cardinal Health Inc. (NYSE: CAH) reported a 15% increase in quarterly earnings on generic drugs and medical products as well as lower costs of products sold despite a decline in revenue. Results exceeded Street's expectations.
Profit from continuing operations grew 15% to $303 million for the second quarter. Adjusted earnings from continuing operations rose to $317 million or $0.93 per share from $281 million or $0.81 per share.
Revenue declined 7% to $25.2 billion.
Analysts, on average, polled by Thomson Reuters had expected a profit of $0.86 per share on revenue of $24.61 billion for the second quarter.
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Revenue for the Pharmaceutical segment declined 8% to $22.7 billion, primarily due to non-renewal of the Express Scripts contract as well as expected conversions from branded pharmaceuticals to lower-priced generics. Segment profit increased 12% largely from overall strong performance from generics programs and benefits of customer and product mix.
Revenue for the Medical segment increased 3% to $2.5 billion, on last year's acquisition of Futuremed and one additional sales day year-on-year. Segment profit grew 11%, driven by the favorable impact of commodities, acquisitions and preferred product mix.
Looking ahead into the fiscal 2013, the company tightened its adjusted earnings from continuing operations guidance to range of $3.42 to $3.50 per share from previous forecast of $3.35 to $3.50 per share, while Street predicts $3.45 per share.
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CAH closed Monday's regular session down 0.50% at $43.66. The stock has been trading between $36.91 and $45.23 for the past 52 weeks.