What happened

Shares of healthcare supply outfit Cardinal Health (CAH -1.24%) are down 12.9% as of midday Thursday after falling short of earnings estimates for its fiscal fourth quarter.

So what

During the three-month stretch ending in June, Cardinal Health turned $42.6 billion in revenue into per-share operating earnings of $0.77. Sales improved by 16% year over year while operating profits tumbled by 26%. Worse, the bottom line missed estimates of $1.20 per share even though the top line easily topped a consensus of $40.4 billion. An accounting adjustment linked to the pandemic is responsible for the bulk of the earnings miss; operating cash flow of $665 million was up 177% from the year-ago quarter.

Hospital staff gathering supplies.

Image source: Getty Images.

The company's guidance for the fiscal year now underway, however, is still seemingly lackluster. Its per-share profit outlook range of $5.60 to $5.90 is well under the consensus of $6.19. The company did not offer any revenue guidance for fiscal 2022, although analysts are calling for revenue growth of 4.4%.

Now what

The knee-jerk response to the news is understandable, but unnecessary. Cardinal stock had already underperformed of late, essentially even with its pre-COVID-19 peak as of Wednesday's close. The weakness indicated investors had already priced in pandemic-related challenges for the healthcare outfit. Thursday's drubbing double-punishes the company for measures taken during a pandemic that forced all companies to only make guesses as to what the future may or may not hold.

This, in addition to the fact that today's steep sell-off leaves shares at a single-digit P/E ratio -- and that's with the worst-case scenario -- makes Thursday's plunge a pretty good entry opportunity for investors looking at the long term.