CARDINAL HEALTH INC (CAH): Results of Operations and Financial Condition
CARDINAL HEALTH INC (CAH) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 FOR IMMEDIATE RELEASE Cardinal Health Reports Fourth Quarter and Fiscal Year 2026 Results and Provides Fiscal Year 2027 Guidance • Fourth quarter revenue increased 6% to $63.7 billion • Fourth quarter GAAP 1 diluted EPS increased 70% to $1.70 • Excluding a one-time p
How this was made
The 30-second read
Why it matters
The most tradable elements are the quantified FY2027 non-GAAP EPS range ($12.40 to $12.60, +13% to +15% growth) and the expanded $5.0B repurchase authorization, both of which can drive near-term valuation and positioning. The IEEPA tariff refund discussion is important for assessing earnings normalization and margin durability.
Market read
A company-specific earnings and guidance update with explicit EPS range and a larger buyback authorization is likely to be a primary driver of trading activity.
What to watch
The guidance is framed on non-GAAP metrics and includes interest and other expense headwinds; traders may focus on whether cash flow and segment profit growth can sustain the EPS range without tariff-related items.
Cardinal Health Reports Fourth Quarter and Fiscal Year 2026 Results and Provides Fiscal Year 2027 Guidance
Fourth-quarter revenue increased 6%, GAAP operating earnings increased 70%, non-GAAP operating earnings increased 30%, and reported non-GAAP diluted EPS increased 40%. Fiscal year 2027 non-GAAP EPS guidance calls for 13% to 15% growth.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $63.7 billion | – | 6% |
| Operating earningsGAAP | $729 million | – | 70% |
| Non-GAAP operating earningsnon-GAAP | $935 million | – | 30% |
| Net earnings attributable to Cardinal Health, Inc.GAAP | $398 million | – | 67% |
| Non-GAAP net earnings attributable to Cardinal Health, Inc.non-GAAP | $682 million | – | 36% |
| Effective Tax RateGAAP | 27.9% | – | – |
| Non-GAAP Effective Tax Ratenon-GAAP | 22.5% | – | – |
| Diluted EPS attributable to Cardinal Health, Inc.GAAP | $1.70 | – | 70% |
| Non-GAAP diluted EPS attributable to Cardinal Health, Inc.non-GAAP | $2.91 | – | 40% |
| Non-GAAP diluted EPS excluding the IEEPA tariff refund recognitionnon-GAAP | $2.60 | – | 25% |
| RevenueGAAP | $254.2 billion | – | 14% |
| Operating earningsGAAP | $2.6 billion | – | 15% |
| Non-GAAP operating earningsnon-GAAP | $3.6 billion | – | 30% |
| Net earnings attributable to Cardinal Health, Inc.GAAP | $1.7 billion | – | 10% |
| Non-GAAP net earnings attributable to Cardinal Health, Inc.non-GAAP | $2.7 billion | – | 34% |
| Effective Tax RateGAAP | 21.6% | – | – |
| Non-GAAP Effective Tax Ratenon-GAAP | 19.0% | – | – |
| Diluted EPS attributable to Cardinal Health, Inc.GAAP | $7.23 | – | 12% |
| Non-GAAP diluted EPS attributable to Cardinal Health, Inc.non-GAAP | $11.26 | – | 37% |
| Non-GAAP diluted EPS excluding the IEEPA tariff refund recognitionnon-GAAP | $10.95 | – | 33% |
| Pharmaceutical and Specialty Solutions segment profitother | $645 million | – | 21% |
| Global Medical Products and Distribution segment profitother | $150 million | – | N.M. |
| Other segment profitother | $183 million | – | 14% |
| Pharmaceutical and Specialty Solutions segment profitother | $2.8 billion | – | 23% |
| Global Medical Products and Distribution segment profitother | $258 million | – | 91% |
| Other segment profitother | $707 million | – | 37% |
| Operating cash flowGAAP | $5.2 billion | – | – |
| Adjusted free cash flownon-GAAP | $5.0 billion | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Pharmaceutical and Specialty SolutionsDriven by brand and specialty pharmaceutical sales growth from existing customers. | $58.8 billion | – | 6% |
| Global Medical Products and DistributionLower distribution volumes and the recognition of the expected IEEPA tariff refund repayment to customers, partially offset by Cardinal Health brand growth. | $3.1 billion | – | (2)% |
| OtherGrowth across Nuclear and Precision Health Solutions, OptiFreight Logistics, and at-Home Solutions. | $1.7 billion | – | 7% |
Fiscal year 2027 outlook
- Tax rateNon-GAAP effective tax rate 19.0% to 20.0%
- NoteNon-GAAP earnings per share $12.40 to $12.60
- NoteNon-GAAP diluted EPS of +13% to +15% growth
- NotePharmaceutical and Specialty Solutions segment: Revenue 3% to 5% growth
- NotePharmaceutical and Specialty Solutions segment: Segment profit 8% to 11% growth
- NoteGlobal Medical Products and Distribution segment: Revenue 2% to 4% growth
- NoteGlobal Medical Products and Distribution segment: Segment profit $200 million to $220 million
- NoteOther (NPHS, at-Home Solutions, OptiFreight Logistics): Revenue 11% to 13% growth
- NoteOther (NPHS, at-Home Solutions, OptiFreight Logistics): Segment profit 15% to 18% growth
- NoteInterest and other $240 million to $290 million
- NoteDiluted weighted average shares outstanding ~233 million
- NoteShare repurchases ~$1 billion
- NoteCapital Expenditures ~$700 million
- NoteNon-GAAP adjusted free cash flow $3.5 billion to $4.0 billion
Capital returns
- Cardinal Health recently completed an additional $350 million accelerated share repurchase program.
- Year-to-date share repurchases in fiscal year 2026 were $1.4 billion.
- Cardinal Health Board of Directors approved a $5.0 billion increase to the share repurchase program, bringing the total share repurchase authorization to $6.4 billion as of August 2026.
- Cardinal Health Board of Directors declared a regular quarterly dividend of $0.5158 per share, payable on October 15, 2026, to shareholders of record on October 1, 2026.
What drove it
- Pharmaceutical and Specialty Solutions segment profit benefited from contributions from brand and specialty products and positive generics program performance.
- Global Medical Products and Distribution segment profit was primarily driven by IEEPA tariff refunds.
- Other segment profit was driven by growth in OptiFreight Logistics and at-Home Solutions.
- Fiscal year non-GAAP operating earnings were driven by segment profit increases across all five operating segments.
- Reported non-GAAP diluted EPS reflected higher non-GAAP earnings, a lower non-GAAP effective tax rate, and a lower share count, partially offset by an increase in interest and other expense.
Concerns
- Global Medical Products and Distribution fourth-quarter revenue decreased 2%, primarily driven by lower distribution volumes and the recognition of the expected IEEPA tariff refund repayment to customers.
- The fourth-quarter reported non-GAAP diluted EPS included a one-time net operating profit impact of IEEPA tariff refunds of $100 million in the GMPD segment.
- Interest and other expense increased.
What to watch
- Pharmaceutical and Specialty Solutions fiscal year 2027 revenue growth guidance of 3% to 5% and segment-profit growth guidance of 8% to 11%.
- Global Medical Products and Distribution fiscal year 2027 revenue growth guidance of 2% to 4% and segment-profit guidance of $200 million to $220 million.
- Other fiscal year 2027 revenue growth guidance of 11% to 13% and segment-profit growth guidance of 15% to 18%.
- Fiscal year 2027 non-GAAP adjusted free cash flow guidance of $3.5 billion to $4.0 billion.
- Estimated impact of the recently completed tuck-in acquisition of Strive Medical and the announced tuck-in acquisition of the Diabetes Health business of AdaptHealth.
- The new distribution center in Indianapolis set to open in 2027 featuring advanced robotics and automation.
Balance sheet and cash flow
- Fiscal year 2026 operating cash flow $5.2 billion.
- Fiscal year 2026 adjusted free cash flow $5.0 billion.
- New $4.0 billion revolving credit facility replacing three historic facilities.
Analysis
Cardinal Health closed fiscal 2026 with fourth-quarter revenue of $63.7 billion, up 6%, alongside GAAP operating earnings of $729 million, up 70%. Non-GAAP operating earnings increased 30% to $935 million and reported non-GAAP diluted EPS increased 40% to $2.91. The company stated that excluding a one-time positive impact of $0.31 from recognition of the IEEPA tariff refund, fourth-quarter non-GAAP diluted EPS increased 25% to $2.60.
The Pharmaceutical and Specialty Solutions business remained the largest reported revenue contributor, with revenue of $58.8 billion, up 6%, supported by brand and specialty pharmaceutical sales growth from existing customers. Its segment profit increased 21% to $645 million, with contributions from brand and specialty products and positive generics program performance. Other revenue increased 7% to $1.7 billion, while Other segment profit increased 14% to $183 million, driven by OptiFreight Logistics and at-Home Solutions.
GMPD was the principal mixed element of the quarter. Revenue decreased 2% to $3.1 billion, reflecting lower distribution volumes and recognition of the expected IEEPA tariff refund repayment to customers. GMPD segment profit increased to $150 million from $70 million, primarily driven by IEEPA tariff refunds. The filing identifies a one-time net operating profit impact of IEEPA tariff refunds of $100 million in GMPD, making the treatment of tariff-related items central to assessing reported profit growth.
For the full year, revenue was $254.2 billion, up 14%, while non-GAAP operating earnings increased 30% to $3.6 billion and reported non-GAAP diluted EPS increased 37% to $11.26. Fiscal year operating cash flow was $5.2 billion and adjusted free cash flow was $5.0 billion. Capital allocation included $1.4 billion of fiscal 2026 share repurchases, a $5.0 billion increase to the authorization, and a regular quarterly dividend of $0.5158 per share.
Fiscal year 2027 guidance calls for non-GAAP earnings per share of $12.40 to $12.60, described as +13% to +15% growth based upon adjusted fiscal year 2026 results excluding the IEEPA tariff refund benefit. The guide includes GMPD segment profit of $200 million to $220 million, Other revenue growth of 11% to 13%, and non-GAAP adjusted free cash flow of $3.5 billion to $4.0 billion. Guidance reflects the estimated impact of the completed Strive Medical acquisition and the announced acquisition of AdaptHealth's Diabetes Health business.
Management, verbatim
Fiscal 2026 was a standout year for Cardinal Health and I am pleased with our strong fourth quarter results. The broad-based operational strength for the year, with all five of our operating segments growing profit double-digits, even before recognition of IEEPA tariff recoveries in GMPD, reflects the disciplined execution of our strategy and our investments for growth. We enter Fiscal 2027 with momentum and confidence in our ability to deliver continued shareholder value creation.
Jason Hollar, CEO of Cardinal Health
Not in the filing
stated, not guessed- Fiscal period end date
- GAAP and non-GAAP gross margin
- GAAP and non-GAAP operating expenses
- Prior-quarter values and quarter-over-quarter changes for reported financial metrics
- Fourth-quarter operating cash flow and adjusted free cash flow
- Prior-year comparisons for fiscal year 2026 operating cash flow and adjusted free cash flow
- Cash balance
- Debt balance
- Consolidated fiscal year 2027 revenue guidance
- Fiscal year 2027 gross-margin guidance
- Fiscal year 2027 operating-expense guidance
- Prior-quarter outlook for comparison with reported results
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is an SEC Form 8-K (Item 2.02) with Cardinal Health’s Q4 and full-year FY2026 results and its FY2027 non-GAAP EPS guidance, alongside capital return and credit facility updates.
Ticker impact
Cardinal Health reported FY2026 results and issued FY2027 non-GAAP EPS guidance of $12.40 to $12.60, plus $5.0B incremental buyback authorization.
Likely positive bias for the stock on guidance credibility and buyback optics, with upside/downside tied to how investors view the IEEPA tariff refund normalization.
The 8-K discloses specific FY2026 performance metrics, a quantified FY2027 EPS range, and a board-approved $5.0B increase to repurchase authorization, all of which are direct inputs to valuation and near-term positioning.
Market effects
Signals strength in pharmaceutical distribution and specialty services demand, potentially supporting sentiment across healthcare supply-chain peers.
Primarily US-listed large-cap healthcare services sentiment; limited direct regional spillover beyond US trading flows.
IEEPA tariff refund references suggest cross-border policy sensitivity, but the guidance is company-specific and US-traded.
Counterpoint
Investors may discount the guidance quality if FY2026 EPS benefited from one-time IEEPA tariff refund recognition, making normalized earnings less impressive.
Key entities
- companyCardinal Health
Reported Q4 and FY2026 results and provided FY2027 non-GAAP EPS guidance, plus incremental share repurchase authorization.
- customer/partnerKroger
Wholesaler distribution contract renewal is mentioned as a long-term renewal highlight.
- acquisition targetStrive Medical
Recently completed tuck-in acquisition referenced in FY2027 guidance assumptions.
- acquisition targetAdaptHealth
Announced tuck-in acquisition of its Diabetes Health business referenced in FY2027 guidance assumptions.
