Cardinal Health reported its fourth-quarter earnings for fiscal 2025, showing a slight earnings beat but a miss on revenue forecasts. The company posted earnings per share (EPS) of $2.08, surpassing the expected $2.03, while revenue fell short at $60.2 billion compared to the forecasted $60.92 billion. Following the announcement, Cardinal Health’s stock dropped 11.58% in pre-market trading, reflecting investor concerns over the revenue shortfall. According to data, the company maintains a 'GREAT' overall financial health score of 3.27/5, with particularly strong momentum and profitability metrics. The stock appears undervalued based on InvestingPro’s Fair Value analysis.\n\nKey Takeaways:\n- Cardinal Health’s EPS exceeded expectations, but revenue missed forecasts.\n- The company’s stock fell over 11% in pre-market trading.\n- Strategic acquisitions and innovations were highlighted during the earnings call.\n- Fiscal 2026 guidance indicates strong growth expectations.\n\nCompany Performance:\nCardinal Health demonstrated solid earnings growth in Q4 2025, with operating earnings increasing by 19% to $719 million. Despite the revenue miss, the company maintained its position with a diversified product portfolio and strategic acquisitions, such as Solaris Health. The focus on expanding its specialty alliance and launching new products like the Kendall DL MultiSystem medical monitoring device underscores its commitment to innovation.\n\nFinancial Highlights:\n- Revenue: $60.2 billion (flat year-over-year)\n- Earnings per share: $2.08 (up 13% year-over-year)\n- Operating earnings: $719 million (up 19% year-over-year)\n- Adjusted free cash flow: $2.5 billion for the full year\n\nEarnings vs. Forecast:\nCardinal Health reported an EPS of $2.08, beating the forecasted $2.03 by 2.46%. However, revenue came in at $60.2 billion, missing the forecast by 1.18%. This mixed result reflects the company’s continued strength in earnings but challenges in meeting revenue expectations.\n\nMarket Reaction:\nFollowing the earnings release, Cardinal Health’s stock saw a significant decline, with a pre-market drop of 11.58%. The stock’s last trading price was $139.40, down from a previous close of $157.66. This reaction highlights investor concerns over the revenue miss and its potential implications for future growth.\n\nOutlook & Guidance:\nLooking ahead to fiscal 2026, Cardinal Health has raised its EPS guidance to $9.30–$9.50, projecting a growth rate of 13–15%. The pharmaceutical segment is expected to see revenue growth of 11–13%, while other growth businesses are projected to grow by 26–28%. The company plans to continue investing in specialty and growth businesses and driving operational efficiencies. With a PEG ratio of 0.16 and 13 analysts recently revising earnings estimates upward, the company shows strong growth potential relative to its current valuation. The stock has delivered an impressive 59% return over the past year, trading near its 52-week high of $168.44.\n\nExecutive Commentary:\nCEO Jason Hollar emphasized the company’s unique position in the market, stating, 'We are uniquely positioned to support these efforts with the products and services that are absolutely indispensable to our customers and patients.' CFO Aaron Ault expressed confidence in the company’s growth trajectory, noting, 'We feel well positioned to deliver another strong year of operating earnings growth.'\n\nRisks and Challenges:\n- Revenue growth challenges: The revenue miss in Q4 raises concerns about future sales performance.\n- Market competition: Increased competition in the healthcare sector could pressure Cardinal Health’s market share.\n- Supply chain disruptions: Potential disruptions could impact product availability and cost structures.\n- Regulatory changes: Changes in healthcare regulations could affect operational strategies.\n- Economic conditions: Macroeconomic factors could influence consumer spending and healthcare demand.\n\nQ&A:\nDuring the earnings call, analysts inquired about the details of the Solaris Health acquisition, strategies for mitigating tariffs, and competitive bidding concerns in the home solutions segment. The company’s management addressed these topics, emphasizing their strategic focus and operational efficiencies.\n\nThe company’s strategy centers on strengthening its core and expanding in specialty, both of which are essential for unlocking long-term value. In fiscal 2025, Cardinal Health successfully onboarded new customers contributing approximately $10 billion in new business and made significant strides in streamlining and accelerating the onboarding process. The company also launched a new consumer health logistics center, the first of its kind, and a new ordering platform, Fantas HQ, to enhance service and capabilities.\n\nIn specialty, the acquisition of Solaris Health, the nation’s leading urology managed services organization, accelerates progress in building the specialty alliances and multi-specialty MSO platform. This adds over 750 providers across 14 states to the Specialty Alliance, solidifying Cardinal Health’s leadership in the urology therapeutic area. The acquisition strengthens the business model by adding scale and expanding reach to patients and providers in new communities.\n\nThe company continues to see strong demand across its upstream biopharma solutions businesses, expecting 20% revenue growth in fiscal 2026 and beyond. This includes the SYNNEXIS patient access business, where the team’s excellent patient and provider experience is leading to 40 expected launches in calendar year 2025, growth of over 30% driven by investments in product innovation and technology.\n\nIn GMPD, the segment delivered operational and profit improvements in Q4 and fiscal 2025, reflecting progress against improvement plan initiatives. The company launched the Kendall DL MultiSystem, a multi-parameter single patient use monitoring cable and leadwire system that enables continuous monitoring of cardiac activity, blood oxygen level, and temperature with one point of connection, simplifying patient monitoring and driving efficiencies for providers.\n\nIn nuclear and precision health solutions, the company continues to outpace the market, driven by differentiated offerings and early investments. It is strategically expanding its PET cyclotron capacity in 11 key markets and enhancing its Center for Theranostics advancement to support a strong pipeline of products targeting oncology, urology, and neurology. Demand for theranostics products grew over 30% in fiscal 2025, with the urology portfolio experiencing even greater growth.\n\nIn At Home Solutions, Q4 revenue grew nearly 50% and double digits on an organic basis, significantly outpacing increases in freight and warehousing costs. The company is continuing investments with a new state-of-the-art distribution center on the West Coast, planned to break ground in fiscal 2026. This facility will leverage the latest robotics and technology to enhance supply chain efficiency, quality, and employee safety.\n\nOptifreight Logistics continues to demonstrate value, providing strategic logistics support to customers as an extension of their teams. The company’s proprietary technology-driven platform, TotalView Insights, continues to deliver cost savings, transparency, and operational efficiency for customers.\n\nOverall, Cardinal Health is well positioned to carry forward its momentum into fiscal 2026, with strong cash flows and a robust balance sheet supporting strategic plans. The company remains focused on executing its strategy, serving customers and patients, and delivering value creation.\n\nThe company believes it is uniquely positioned to support efforts to increase access, affordability, and innovation in healthcare. It continues to believe that policymakers and stakeholders are aligned with its goals of increasing access, affordability, and innovation in healthcare. As it enters fiscal 2026, the company operates from a position of strength and remains focused on executing its strategy, serving customers and patients, and delivering value creation.

Earnings call transcript: Cardinal Health Q4 2025 misses revenue forecast

Cardinal Health reported its fourth-quarter 2025 earnings, posting earnings per share of $2.08, which exceeded the forecasted $2.03, but revenue fell short at $60.2 billion compared to the expected $60.92 billion. The company's stock dropped 11.58% in pre-market trading following the announcement. Despite the revenue miss, operating earnings rose 19% to $719 million, and adjusted free cash flow reached $2.5 billion for the full year. The company raised its fiscal 2026 EPS guidance to $9.30–$9.50, with growth expectations of 13–15% and segment-specific growth projections. Strategic acquisitions, including Solaris Health, and product innovations such as the Kendall DL MultiSystem and Fantas HQ platform were highlighted as key drivers of future growth. The company also launched a new consumer health logistics center and continues to expand in specialty and at-home solutions segments.