Cardinal Health, Inc. (CAH) Bundle
A Brief History of Cardinal Health
Company Overview
Cardinal Health, Inc. is a global, integrated healthcare services and products company, specializing in the distribution of pharmaceuticals and medical products. As of September 30, 2024, Cardinal Health reported total assets of $43.1 billion and total liabilities of $43.1 billion, resulting in a shareholders' deficit of $3.3 billion.
Financial Performance
For the three months ended September 30, 2024, Cardinal Health generated revenues of $52.3 billion, a decrease from $54.7 billion in the same period of the previous year. The cost of products sold for this quarter was $50.4 billion, leading to a gross margin of $1.9 billion.
| Financial Metric | Q1 FY2025 | Q1 FY2024 |
|---|---|---|
| Revenue | $52.3 billion | $54.7 billion |
| Cost of Products Sold | $50.4 billion | $52.9 billion |
| Gross Margin | $1.9 billion | $1.7 billion |
| Operating Earnings | $568 million | ($32 million) |
| Net Earnings | $416 million | ($12 million) |
Shareholder Returns and Dividends
Cardinal Health has been active in returning capital to its shareholders. In the three months ending September 30, 2024, the company declared dividends totaling $119 million, with a quarterly dividend of $0.5056 per share. The company also executed an accelerated share repurchase program, deploying $375 million for repurchases.
Recent Developments
In March 2024, Cardinal Health completed the acquisition of Specialty Networks for $1.2 billion. Additionally, on September 20, 2024, Cardinal Health announced its intention to acquire Integrated Oncology Network for $1.1 billion.
Segment Performance
The Pharmaceutical and Specialty Solutions segment reported a profit of $530 million, up 16% year-over-year, driven by increased sales in branded pharmaceuticals. However, the Global Medical Products and Distribution segment faced challenges, with profits declining to $8 million.
| Segment | Profit (Q1 FY2025) | Profit (Q1 FY2024) |
|---|---|---|
| Pharmaceutical and Specialty Solutions | $530 million | $456 million |
| Global Medical Products and Distribution | $8 million | $12 million |
| Other Segments | $104 million | $96 million |
| Total Segment Profit | $642 million | $564 million |
Legal and Regulatory Matters
Cardinal Health has accrued $5.0 billion related to opioid litigation as of September 30, 2024. The company made its fourth annual payment of $366 million under the National Opioid Settlement Agreement during this quarter.
Capital Expenditures
Capital expenditures for the quarter were $90 million, consistent with the previous year's spending of $92 million.
A Who Owns Cardinal Health, Inc. (CAH)
Major Shareholders
As of 2024, the ownership of Cardinal Health, Inc. (CAH) is distributed among various institutional and individual shareholders. The following table outlines the major shareholders and their respective ownership percentages:
| Shareholder | Ownership Percentage | Number of Shares Owned (in millions) |
|---|---|---|
| BlackRock, Inc. | 8.5% | 27.8 |
| The Vanguard Group, Inc. | 8.1% | 26.7 |
| State Street Corporation | 6.5% | 21.5 |
| FMR LLC (Fidelity) | 5.9% | 19.5 |
| Invesco Ltd. | 4.1% | 13.5 |
| Other Institutional Holders | 34.0% | 111.8 |
| Individual Investors | 22.9% | 75.5 |
| Insider Holdings | 0.4% | 1.3 |
Institutional Ownership
Institutional investors hold a significant portion of Cardinal Health's shares, indicative of strong institutional confidence in the company’s operations and future prospects. The total institutional ownership is approximately 69.1% as of September 30, 2024, which includes the major shareholders listed above.
Insider Ownership
Insider ownership reflects the shares held by the executives and board members of Cardinal Health. As of the latest reports, insider ownership stands at about 0.4%, which translates to approximately 1.3 million shares. This level of ownership suggests a modest alignment of interests between management and shareholders.
Recent Share Repurchase Activity
Cardinal Health has engaged in share repurchase activities as part of its capital allocation strategy. In the third quarter of fiscal 2025, the company repurchased shares worth $375 million under an accelerated share repurchase program, significantly impacting the number of shares available in the market.
Market Performance
As of September 30, 2024, Cardinal Health's stock is trading at approximately $110.10 per share. The company's market capitalization is around $32.3 billion, reflecting its standing in the healthcare distribution sector.
Dividends
Cardinal Health has maintained a consistent dividend payout, with a quarterly dividend declared at $0.5056 per share, amounting to an annualized dividend of $2.02 per share.
Financial Summary
For the three months ended September 30, 2024, Cardinal Health reported revenue of $52.3 billion, with a gross margin of $1.9 billion. The net earnings attributable to Cardinal Health, Inc. for the same period were $416 million, translating to a diluted earnings per share (EPS) of $1.70.
| Financial Metric | Value |
|---|---|
| Revenue | $52.3 billion |
| Gross Margin | $1.9 billion |
| Net Earnings | $416 million |
| Diluted EPS | $1.70 |
| Cash and Equivalents | $2.9 billion |
Cardinal Health, Inc. (CAH) Mission Statement
As of 2024, Cardinal Health, Inc. focuses on advancing healthcare by providing innovative products and services that enhance the health and well-being of patients. The mission statement emphasizes the commitment to delivering value through quality, reliability, and efficiency in healthcare supply chain management and pharmaceutical distribution.
Financial Overview
Cardinal Health reported a revenue of $52.3 billion for the three months ended September 30, 2024, a decrease of 4% compared to $54.7 billion in the same period of 2023. The decrease was primarily attributed to the expiration of contracts with OptumRx, partially offset by growth in branded and specialty pharmaceuticals.
| Financial Metrics | Q1 2025 | Q1 2024 |
|---|---|---|
| Revenue | $52,277 million | $54,650 million |
| Cost of Goods Sold | $50,375 million | $52,907 million |
| Gross Margin | $1,902 million | $1,743 million |
| Operating Earnings | $568 million | $(32) million |
| Net Earnings | $416 million | $(12) million |
| GAAP Diluted EPS | $1.70 | $(0.05) |
| Non-GAAP Diluted EPS | $1.88 | $1.72 |
| Cash and Equivalents | $2,867 million | $5,133 million |
| Share Repurchase Program | $375 million | $500 million |
Segment Performance
The performance across Cardinal Health's segments reflects a strategic focus on enhancing operational efficiencies and expanding service offerings.
| Segment | Q1 2025 Profit | Q1 2024 Profit |
|---|---|---|
| Pharmaceutical and Specialty Solutions | $530 million | $456 million |
| Global Medical Products and Distribution | $8 million | $12 million |
| Other | $104 million | $96 million |
| Total Segment Profit | $642 million | $564 million |
Key Developments
Cardinal Health has been active in expanding its capabilities through acquisitions. Notably, on September 20, 2024, the company announced its intention to acquire Integrated Oncology Network for $1.1 billion in cash, which aims to bolster its oncology services.
Additionally, the company has made significant strides in addressing legal and regulatory challenges, including a $366 million payment related to opioid litigation as part of the National Opioid Settlement Agreement.
Shareholder Returns
Cardinal Health remains committed to returning value to its shareholders. The company declared a quarterly dividend of $0.5056 per share, consistent with its previous dividends, reflecting a stable return strategy.
| Dividends | Q1 2025 | Q1 2024 |
|---|---|---|
| Quarterly Dividend Per Share | $0.5056 | $0.5006 |
| Annualized Dividend Per Share | $2.02 | $2.00 |
Overall, Cardinal Health's mission statement and strategic focus serve to enhance its role within the healthcare ecosystem, ensuring a commitment to quality and patient-centered care while navigating the complexities of the healthcare market. The financial performance metrics and strategic initiatives underscore the company's resilience and adaptability in a challenging economic environment.
How Cardinal Health, Inc. (CAH) Works
Overview of Business Operations
Cardinal Health, Inc. operates in two primary segments: Pharmaceutical and Specialty Solutions and Global Medical Products and Distribution. As of September 30, 2024, Cardinal Health reported total revenue of $52.3 billion, a decrease of 4% from the prior year, primarily due to the expiration of contracts with OptumRx.
Financial Performance
The financial performance for the three months ended September 30, 2024, is summarized as follows:
| Metric | Q1 2025 | Q1 2024 | Change |
|---|---|---|---|
| Revenue | $52,277 million | $54,650 million | -4% |
| Cost of Products Sold | $50,375 million | $52,907 million | -5% |
| Gross Margin | $1,902 million | $1,743 million | +9% |
| Operating Earnings | $568 million | $(32) million | N.M. |
| Net Earnings | $416 million | $(12) million | N.M. |
| GAAP Diluted EPS | $1.70 | $(0.05) | N.M. |
| Non-GAAP Diluted EPS | $1.88 | $1.72 | +9% |
Segment Performance
Segment performance is evaluated based on segment profit. For the three months ended September 30, 2024, the contributions were as follows:
| Segment | Segment Profit (in millions) | Q1 2025 | Q1 2024 | Change |
|---|---|---|---|---|
| Pharmaceutical and Specialty Solutions | $530 million | $456 million | +16% | |
| Global Medical Products and Distribution | $8 million | $12 million | N.M. | |
| Other | $104 million | $96 million | +8% | |
| Total Segment Profit | $642 million | $564 million | +14% |
Cash Flow and Liquidity
The cash flow statement for the three months ended September 30, 2024, reveals significant cash movements:
| Cash Flow Category | Q1 2025 (in millions) |
|---|---|
| Net Cash Used in Operating Activities | $(1,647) |
| Cash Used in Investing Activities | $(88) |
| Cash Used in Financing Activities | $(540) |
| Cash and Equivalents at End of Period | $2,867 |
Shareholder Returns and Repurchases
During the three months ended September 30, 2024, Cardinal Health repurchased shares under an accelerated share repurchase program for a total of $375 million. The details of share repurchases are as follows:
| Period | Total Shares Purchased | Average Price Paid per Share | Approximate Dollar Value of Shares That May Yet be Purchased (in millions) |
|---|---|---|---|
| July 2024 | 143 | $95.46 | $3,493 |
| August 2024 | 2,736,169 | $109.65 | $3,193 |
| September 2024 | 723 | $111.72 | $3,193 |
| Total | 2,737,035 | $109.65 | $3,193 |
Acquisitions
In September 2024, Cardinal Health announced the acquisition of Integrated Oncology Network for a purchase price of $1.1 billion in cash. This acquisition is expected to enhance Cardinal Health's oncology service offerings.
Legal and Regulatory Matters
As of September 30, 2024, Cardinal Health had accrued $5.0 billion related to opioid litigation matters. This includes ongoing settlements under the National Opioid Settlement Agreement.
How Cardinal Health, Inc. (CAH) Makes Money
Revenue Segments
Cardinal Health operates through two primary segments: Pharmaceutical and Specialty Solutions and Global Medical Products and Distribution.
| Segment | Revenue (Q1 FY 2025) | Revenue Change YoY |
|---|---|---|
| Pharmaceutical and Specialty Solutions | $47.99 billion | -5% |
| Global Medical Products and Distribution | $3.12 billion | +3% |
| Other Revenue | $1.19 billion | +13% |
| Total Revenue | $52.28 billion | -4% |
Cost Structure
For the three months ended September 30, 2024, Cardinal Health reported a cost of products sold (COGS) of $50.38 billion, resulting in a gross margin of $1.90 billion.
The gross margin increased by 9% compared to the previous year, primarily due to improved contributions from branded pharmaceutical products and generics programs.
| Financial Metric | Q1 FY 2025 | Q1 FY 2024 |
|---|---|---|
| Cost of Products Sold | $50.38 billion | $52.91 billion |
| Gross Margin | $1.90 billion | $1.74 billion |
| Gross Margin Rate | 3.64% | 3.19% |
Operating Earnings
Cardinal Health reported operating earnings of $568 million for Q1 FY 2025, a significant recovery from an operating loss of $32 million in Q1 FY 2024.
This turnaround was driven by strong performance in the Pharmaceutical and Specialty Solutions segment, which contributed $530 million to the operating earnings.
| Operating Earnings Components | Q1 FY 2025 | Q1 FY 2024 |
|---|---|---|
| Pharmaceutical and Specialty Solutions | $530 million | $456 million |
| Global Medical Products and Distribution | $8 million | $12 million |
| Other | $104 million | $96 million |
| Total Operating Earnings | $568 million | ($32 million) |
Key Drivers of Revenue
- Expiration of OptumRx contracts, which represented 17% of consolidated revenue in FY 2024.
- Growth in branded and specialty pharmaceutical sales from existing customers.
- Increased volumes in the Global Medical Products segment, primarily from existing customers.
- Performance of the generics program, driven by customer volumes and pricing changes.
Cash Flow and Financial Position
As of September 30, 2024, Cardinal Health reported cash and equivalents of $2.87 billion, down from $5.13 billion at the end of June 2024. The decrease was attributed to significant cash outflows for operating activities and share repurchases.
| Cash Flow Metrics | Q1 FY 2025 | Q1 FY 2024 |
|---|---|---|
| Net Cash Used in Operating Activities | ($1.65 billion) | $528 million |
| Capital Expenditures | $90 million | $92 million |
| Share Repurchases | $375 million | $500 million |
Dividends and Shareholder Returns
Cardinal Health declared a quarterly dividend of $0.5056 per share, amounting to an annualized rate of $2.02 per share. This was consistent with previous periods and reflects the company's commitment to returning value to shareholders.
Legal and Settlement Obligations
As of September 30, 2024, Cardinal Health had $5 billion accrued for opioid litigation settlements, which includes payments related to the National Opioid Settlement Agreement.
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Article updated on 8 Nov 2024
Resources:
- Cardinal Health, Inc. (CAH) Financial Statements – Access the full quarterly financial statements for Q1 2025 to get an in-depth view of Cardinal Health, Inc. (CAH)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Cardinal Health, Inc. (CAH)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.