Cardinal Health logs fiscal Q1 sales miss, earnings beat, announces CEO succession

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Cardinal HealthCardinal Health (NYSE:CAH) today saw its fiscal first-quarter profits plunge on sales growth of nearly 2% and announced its plans for a CEO succession

Dublin, Ohio-based Cardinal posted profits of $115 million, or 36¢ per share, on sales of $32.64 million for the three months ended Sept. 30, for a bottom-line decrease of -62.8% on sales growth of 1.9% compared with fiscal Q1 2017.

Adjusted to exclude one-time items, earnings per share were $1.09, 9¢ ahead of the consensus forecast on Wall Street, where analysts were looking for sales of $33.48 billion.

“Fiscal year 2018 started largely as we expected and included strong performance from many of our business lines across the segments. With one quarter behind us, we remain comfortable with our full-year guidance. We’re excited to have closed the patient recovery transaction during Q1 and are pleased to report the integration is going well,” chairman & CEO George Barrett said in prepared remarks. “I’d also like to thank our extraordinary colleagues who showed their commitment to serving both their communities and our customers in the midst of multiple recent natural disasters.”

Cardinal Health said it still expects to post adjusted EPS of $4.85 to $5.10 for fiscal 2018.

In a separate release, the company said Barrett is slated to leave the corner office Jan. 1, 2018, to be replaced by CFO Mike Kaufmann; Barrett is due to stay on as chairman until Cardinal’s annual shareholders meeting in November 2018, replaced by board member Gregory Kenny. Medical segment finance chief Jorge Gomez was named to succeed Kaufmann as CFO, Cardinal said.

“As I approach a decade with Cardinal Health, it feels very natural to hand the baton to Mike, who has been a close and trusted partner to me and an integral part of driving our strategy. Mike brings tremendous knowledge of our business, a passion for excellence and a commitment to the values and mission of our organization and he has the respect of our entire organization. The steps we’ve taken to expand our reach and enhance our critical role within the healthcare industry, including our recent acquisition of Medtronic’s patient recovery business, position Cardinal Health well for the future. Mike is a superb leader and operator, well-prepared to take the reins and guide us forward to leverage the full potential of Cardinal Health,” Barrett said in prepared remarks.

“I am honored to be selected as Cardinal Health’s next chief executive. George and I have worked side by side for years and I look forward to continuing our partnership over the next year in ensuring a successful transition. George has built a powerful legacy and strategy that I am proud to have helped craft. I look forward to working with him and our incredibly talented and dedicated team to build on the strong foundation we have in place and further enhance the value we provide to all of our stakeholders, while never losing sight of our ultimate goal of supporting our partners in the critical work they do serving patients and their families,” Kaufmann added. “I have worked with Jorge closely for many years and trust and respect him deeply. I’m thrilled that the board has endorsed this important promotion and I look forward to continuing to work with him to achieve Cardinal Health’s strategic and business objectives in the years ahead. He has proven himself in the most senior finance roles in our two core businesses and his extensive financial experience and familiarity with our business will make him an invaluable partner for me as Cardinal Health’s next CFO.”

CAH shares dipped slightly today in pre-market trading, falling -0.1% to $61.34 apiece.

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