Cardinal Health Reports First Quarter Fiscal Year 2027 Results and Raises Outlook
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 First Quarter Fiscal Year 2027 Results and Raises Outlook • First quarter revenue increased 5% to $67.5 billion • GAAP 1 operating earnings increased 13% to $753 million; GAAP diluted EPS increased 27% to $2.38 • Non-GAAP
How this was made
The 30-second read
Why it matters
The earnings beat and raised guidance provide fresh, material data that can move the stock.
Market read
The new guidance is likely to drive buying interest in CAH and may influence the broader healthcare distribution sector.
What to watch
Potential headwinds from foreign‑exchange impacts and distribution margin pressure could temper upside.
Cardinal Health Reports First Quarter Fiscal Year 2027 Results and Raises Outlook
Revenue, GAAP and non-GAAP earnings, operating cash flow and adjusted free cash flow increased year over year, led by Pharmaceutical and Specialty Solutions and Other. The company raised fiscal year 2027 non-GAAP diluted EPS guidance and increased several segment-level expectations, although Global Medical Products and Distribution segment profit declined.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $67.5B | – | 5% |
| Cost of products soldGAAP | $64.92B | – | 5 % |
| Gross marginGAAP | $2.60B | – | 12 % |
| Distribution, selling, general and administrative expensesGAAP | $1.59B | – | 9 % |
| Restructuring and employee severanceGAAP | $23M | – | – |
| Amortization and other acquisition-related costsGAAP | $182M | – | – |
| Acquisition-related cash and share-based compensation costsGAAP | $94M | – | – |
| Impairments and (gain)/loss on disposal of assets, netGAAP | −$4M | – | – |
| Litigation (recoveries)/charges, netGAAP | −$47M | – | – |
| Operating earningsGAAP | $753M | – | 13% |
| Non-GAAP operating earningsnon-GAAP | $1B | – | 17% |
| Earnings before income taxesGAAP | $688M | – | 15 % |
| Provision for income taxesGAAP | $132M | – | (8) % |
| Net earningsGAAP | $556M | – | 22 % |
| Net earnings attributable to Cardinal Health, Inc.GAAP | $554M | – | 23% |
| Non-GAAP net earnings attributable to Cardinal Health, Inc.non-GAAP | $759M | – | 24% |
| Effective Tax RateGAAP | 19.2% | – | – |
| Non-GAAP Effective Tax Ratenon-GAAP | 18.5% | – | – |
| Basic EPS attributable to Cardinal Health, Inc.GAAP | $ 2.39 | – | 26 % |
| Diluted EPS attributable to Cardinal Health, Inc.GAAP | $2.38 | – | 27% |
| Non-GAAP diluted EPS attributable to Cardinal Health, Inc.non-GAAP | $3.26 | – | 28% |
| Pharmaceutical and Specialty Solutions revenueGAAP | $62.6B | – | 6% |
| Pharmaceutical and Specialty Solutions segment profitGAAP | $783M | – | 17% |
| Pharmaceutical and Specialty Solutions segment profit marginGAAP | 1.25 % | – | – |
| Global Medical Products and Distribution revenueGAAP | $3.2B | – | —% |
| Global Medical Products and Distribution segment profitGAAP | $33M | – | (28)% |
| Global Medical Products and Distribution segment profit marginGAAP | 1.03 % | – | – |
| Other revenueGAAP | $1.8B | – | 7% |
| Other segment profitGAAP | $193M | – | 16% |
| Other segment profit marginGAAP | 10.94 % | – | – |
| Net cash provided by operating activitiesGAAP | $1.40B | – | – |
| Net cash used in investing activitiesGAAP | −$251M | – | – |
| Net cash used in financing activitiesGAAP | −$742M | – | – |
| Additions to property and equipmentGAAP | −$157M | – | – |
| Non-GAAP adjusted free cash flownon-GAAP | $1.58B | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Pharmaceutical and Specialty SolutionsBrand and specialty pharmaceutical sales growth from existing customers. | $62.6B | – | 6% |
| Global Medical Products and DistributionGrowth in Cardinal Health Brand, offset by lower distribution revenue. | $3.2B | – | —% |
| OtherGrowth across Nuclear and Precision Health Solutions, at-Home Solutions, and OptiFreight Logistics. | $1.8B | – | 7% |
Fiscal year 2027 outlook
- Tax rateNon-GAAP effective tax rate of 18.5% to 19.5%
- NoteNon-GAAP diluted EPS of $12.80 to $13.00
- Note+17% to +19% growth compared to its FY26 ex-tariff refund baseline
- Note+14% to +15% growth from reported FY26 results
- NotePharmaceutical and Specialty Solutions profit growth of 10% to 12%
- NoteOther profit growth of 17% to 20%
- NoteOther revenue growth of 12% to 14%
- NoteDiluted weighted average shares outstanding of 231 million to 232 million
Capital returns
- Cardinal Health completes $500 million share repurchase program in first quarter.
- Purchase of treasury shares was $ (500) million, compared with $ (375) million in the first quarter of 2026.
- Dividends on common shares were $ (126) million, compared with $ (129) million in the first quarter of 2026.
What drove it
- Pharmaceutical and Specialty Solutions segment profit was primarily driven by contributions from brand and specialty products and positive generics program performance.
- Other profit growth was driven by OptiFreight Logistics, Nuclear and Precision Health Solutions, and at-Home Solutions.
- Non-GAAP diluted EPS reflected increased non-GAAP operating earnings, a lower share count, and a lower effective tax rate.
- Cardinal Health entered into a binding letter of intent to renew its pharmaceutical distribution agreements with CVS Health.
- Cardinal Health anticipates completing the acquisition of AdaptHealth’s Diabetes Health business in Q3 of fiscal 2027.
Concerns
- Global Medical Products and Distribution segment profit decreased due to unfavorable distribution and foreign exchange impacts, partially offset by growth in Cardinal Health Brand.
- Global Medical Products and Distribution revenue was approximately flat, as Cardinal Health Brand growth was offset by lower distribution revenue.
- The release cites risks related to branded pharmaceutical pricing, tariffs, conflict with Iran, litigation matters, and generics program performance.
- The company does not provide forward-looking guidance on a GAAP basis.
What to watch
- Execution against Pharmaceutical and Specialty Solutions profit growth guidance of 10% to 12%.
- Recovery in Global Medical Products and Distribution profit following unfavorable distribution and foreign exchange impacts.
- Completion of the AdaptHealth’s Diabetes Health business acquisition in Q3 of fiscal 2027.
- The renewal of pharmaceutical distribution agreements with CVS Health and associated continued volume growth.
- Delivery of Other revenue growth of 12% to 14% and Other profit growth of 17% to 20%.
- The impact of the $500 million accelerated share repurchase on diluted weighted average shares outstanding.
Balance sheet and cash flow
- Cash and equivalents were $ 5,264 million at September 30, 2026, compared with $ 4,856 million at June 30, 2026.
- Current portion of long-term obligations and other short-term borrowings was $ 1,886 million at September 30, 2026, compared with $ 1,882 million at June 30, 2026.
- Long-term obligations, less current portion, were $ 6,929 million at September 30, 2026, compared with $ 7,004 million at June 30, 2026.
- Total assets were $ 59,544 million at September 30, 2026, compared with $ 57,299 million at June 30, 2026.
- Total shareholders’ deficit was $ (2,866) million at September 30, 2026, compared with $ (2,724) million at June 30, 2026.
- Net increase in cash and equivalents was $ 408 million, compared with $ 719 million in the first quarter of 2026.
Analysis
Cardinal Health began fiscal 2027 with revenue of $67.5 billion, up 5%, while GAAP operating earnings increased 13% to $753 million. Gross margin increased 12% to $ 2,596 million, exceeding the 9% increase in distribution, selling, general and administrative expenses to $ 1,595 million. GAAP diluted EPS increased 27% to $2.38, and the effective tax rate declined to 19.2% from 24.1%.
Non-GAAP operating earnings increased 17% to $1.0 billion and non-GAAP diluted EPS increased 28% to $3.26. The company attributed the non-GAAP EPS increase to higher non-GAAP operating earnings, a lower share count and a lower effective tax rate. Non-GAAP net earnings attributable to Cardinal Health, Inc. rose 24% to $759 million, while the non-GAAP effective tax rate was 18.5% compared with 21.9%.
Pharmaceutical and Specialty Solutions was the principal earnings contributor. Revenue increased 6% to $62.6 billion on brand and specialty pharmaceutical sales growth from existing customers, while segment profit increased 17% to $783 million. Other revenue increased 7% to $1.8 billion and profit increased 16% to $193 million across OptiFreight Logistics, Nuclear and Precision Health Solutions and at-Home Solutions. In contrast, Global Medical Products and Distribution revenue was approximately flat at $3.2 billion and segment profit declined 28% to $33 million because of unfavorable distribution and foreign exchange impacts.
Cash generation strengthened, with net cash provided by operating activities of $ 1,398 million and non-GAAP adjusted free cash flow of $ 1,583 million, compared with $ 973 million and $ 1,285 million, respectively. The company completed its $500 million share repurchase program in the first quarter and paid $ (126) million in dividends on common shares. Cash and equivalents increased to $ 5,264 million at September 30, 2026 from $ 4,856 million at June 30, 2026.
Management raised fiscal year 2027 non-GAAP diluted EPS guidance to $12.80 to $13.00 from $12.40 to $12.60. It also raised expectations for Pharmaceutical and Specialty Solutions profit growth, Other profit growth and Other revenue growth, while lowering the non-GAAP effective tax-rate assumption and reducing its diluted weighted-average share outlook. The guide does not include forward-looking GAAP measures.
Management, verbatim
Our results reflect a strong start to fiscal 2027 and demonstrate consistent execution against our strategic priorities. We continue to benefit from focused investments, disciplined operations and the strength of our diversified portfolio. Given this quarter's strong performance and our updated expectations for the remainder of the year, we are raising our fiscal 2027 non-GAAP EPS outlook.
Jason Hollar, CEO of Cardinal Health
Not in the filing
stated, not guessed- Prior-quarter comparisons for operating results
- Consolidated gross margin percentage
- Fiscal year 2027 GAAP guidance
- Fiscal year 2027 revenue guidance
- Fiscal year 2027 gross-margin guidance
- Fiscal year 2027 operating-expense guidance
Written by an AI language model 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 checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. 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
Cardinal Health filed an 8‑K reporting Q1 FY2027 results and updating its FY2027 non‑GAAP EPS outlook.
Ticker impact
Cardinal Health raised its FY2027 non‑GAAP EPS guidance to $12.80‑$13.00 after reporting Q1 revenue of $67.5 B and earnings beat.
likely upward pressure as the market prices in the higher earnings outlook
The earnings beat and raised guidance are fresh, material information for a large‑cap distributor, prompting traders to consider buying on the upside.
Market effects
Strengthens the pharmaceutical distribution sector outlook and may lift peers.
Positive for U.S. healthcare distribution stocks.
Reinforces demand for specialty pharma products globally.
Counterpoint
If the guidance raise is already priced in, the stock could face a short‑term pullback.
Key entities
- companyCardinal Health
U.S. pharmaceutical and medical products distributor.
