CAH Q4 Earnings Beat on Pharma Strength, Revenues Miss, Stock Up

Cardinal Health, Inc. CAH reported fourth-quarter fiscal 2026 adjusted earnings per share (EPS) of $2.91, beating the Zacks Consensus Estimate by 20.3%. The bottom line improved 40% year over year, aided by higher operating earnings, IEEPA tariff refunds, a lower tax rate and a reduced share count.

GAAP EPS in the quarter was $1.70 compared with $1.00 in the year-ago period.

Full-year fiscal 2026 adjusted EPS was $11.26, up 37% compared to the figure at the end of the fiscal 2025 period. The company reported GAAP EPS of $7.23 in fiscal 2026, compared with $6.45 in the year-ago period.

Q4 Revenue Details

For the fiscal fourth quarter, revenues were up 6% on a year-over-year basis to $63.67 billion. The top line, however, missed the Zacks Consensus Estimate by 2.9%.

For full-year fiscal 2026, CAH registered revenues of $254.25 billion, up 14% compared with fiscal 2025.

Shares of CAH were up 3.7% in pre-market trading. The company’s shares have climbed 15.4% in the year-to-date period compared with the industry’s 5.9% rise and the S&P 500 Index’s 13.1% gain.

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Segmental Analysis of CAH

Pharmaceutical and Specialty Solutions

Pharmaceutical and Specialty Solutions revenues increased 6% year over year to $58.85 billion. The improvement was driven by brand and specialty pharmaceutical sales growth from existing customers.

The segment’s profit totaled $645 million, up 21% from the year-ago period’s level. The upside was primarily driven by contributions from brand and specialty products and positive generics program performance.

Global Medical Products and Distribution

Revenues in this segment totaled $3.13 billion, down 2% year over year. The decline primarily reflected lower distribution volumes and the recognition of expected IEEPA tariff refund repayments to customers, partially offset by Cardinal Health brand growth.

The segment reported a profit of $150 million compared with $70 million in the year-ago quarter. This improvement was primarily driven by IEEPA tariff refunds.

Other

This segment includes three operating segments — Nuclear and Precision Health Solutions, at-Home Solutions and OptiFreight Logistics. Revenues totaled $1.72 billion, up 7% year over year, driven by growth across all three operating segments.

The segment’s profit amounted to $183 million, up 14% from the year-ago level. This upside was driven by growth in OptiFreight Logistics and at-Home Solutions.

Q4 Margin Analysis

Gross profit increased 16% year over year to $2.56 billion. As a percentage of revenues, the gross margin in the reported quarter was approximately 4.0%, up almost 36 basis points year over year.

Distribution, selling, general and administrative expenses totaled $1.63 billion, up 10% year over year.

Operating income amounted to $729 million, up 70% year over year. Adjusted operating income increased 30% year over year to $935 million.

Financial Update

The company exited the reported quarter with cash and cash equivalents of $4.86 billion compared with $3.94 billion at the end of the third quarter of fiscal 2026.

Net cash provided by operating activities totaled $5.17 billion compared with $2.39 billion in the year-ago period.

CAH Sets FY27 Growth Targets

Cardinal Health raised its fiscal 2027 earnings guidance.

CAH expects fiscal 2027 adjusted EPS in the range of $12.40-$12.60, implying growth of 13-15% from adjusted fiscal 2026 results excluding the IEEPA tariff refund benefit. The Zacks Consensus Estimate for the same is pegged at $12.04.

The company expects revenues from the Pharmaceutical and Specialty Solutions segment to grow 3-5% year over year. Segmental profit is projected to increase 8-11%.

Revenues from the Global Medical Products and Distribution segment are anticipated to grow 2-4%. Segmental profit is expected to be between $200 million and $220 million.

Revenues from the Other segment are likely to increase 11-13%. Segmental profit is projected to grow 15-18%.

Cardinal Health, Inc. Price, Consensus and EPS Surprise

Cardinal Health, Inc. price-consensus-eps-surprise-chart | Cardinal Health, Inc. Quote

Wrapping Up

Cardinal Health delivered mixed fourth-quarter fiscal 2026 results, with earnings surpassing estimates while revenues missed the same. Performance benefited from strength in Pharmaceutical and Specialty Solutions, while the company’s higher-margin growth businesses continued to expand across at-Home Solutions, Nuclear and Precision Health Solutions and OptiFreight Logistics.

Cardinal Health is strengthening these growth platforms through tuck-in acquisitions of Strive Medical and AdaptHealth’s Diabetes Health business. The company launched an outbound pharmacy shipping solution at OptiFreight Logistics and continues to invest in expanding PET and theranostics capabilities within Nuclear and Precision Health Solutions.

On the commercial front, CAH renewed its long-term wholesaler distribution contract with Kroger and plans to open a new Indianapolis distribution center in fiscal 2027 featuring advanced robotics and automation to increase capacity and operational flexibility.

Cardinal Health also remains focused on shareholder returns, completing $1.4 billion of share repurchases in fiscal 2026 and announcing an additional $5 billion repurchase authorization. Supported by continued investments in growth and a positive earnings outlook, the company is targeting sustained expansion across its core and higher-margin businesses.

CAH’s Zacks Rank & Other Key Picks

Cardinal Health carries a Zacks Rank #2 (Buy) at present.

Some other top-ranked stocks from the broader medical space are Globus Medical GMED, West Pharmaceutical WST and The Cooper Companies COO.

Globus Medical, currently sporting a Zacks Rank #1 (Strong Buy), reported a second-quarter 2026 adjusted EPS of $1.34, which surpassed the Zacks Consensus Estimate by 19.6%. Revenues of $789.6 million beat the Zacks Consensus Estimate by 0.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.

GMED has an estimated long-term earnings growth rate of 12.4%. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 27.9%.

West Pharmaceutical, carrying a Zacks Rank #2 at present, reported second-quarter 2026 adjusted earnings per share (EPS) of $2.37, which beat the Zacks Consensus Estimate by 13.9%. Revenues of $872.3 million surpassed the Zacks Consensus Estimate by 4.2%.

WST has an estimated long-term earnings growth rate of 16%. WST’s earnings surpassed estimates in the trailing four quarters, the average surprise being 17.4%.

The Cooper Companies, carrying a Zacks Rank #2 at present, reported a second-quarter fiscal 2026 adjusted EPS of $1.21, which beat the Zacks Consensus Estimate by 10.00%. Revenues of $1.08 billion beat the Zacks Consensus Estimate by 2.6%.

COO has an estimated long-term earnings growth rate of 8.3%. COO’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 5.8%.

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This article originally published on Zacks Investment Research (zacks.com).

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