The 10-second takeaway
For the quarter ended Dec. 31 (Q2), Cardinal Health beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped and GAAP earnings per share expanded significantly.
Margins increased across the board.
Cardinal Health logged revenue of $25.23 billion. The 13 analysts polled by S&P Capital IQ wanted to see a top line of $24.61 billion on the same basis. GAAP reported sales were 6.8% lower than the prior-year quarter's $27.08 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.93. The 15 earnings estimates compiled by S&P Capital IQ forecast $0.86 per share. GAAP EPS of $0.88 for Q2 were 17% higher than the prior-year quarter's $0.75 per share. (The prior-year quarter included -$0.01 per share in earnings from discontinued operations.)
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 4.9%, 80 basis points better than the prior-year quarter. Operating margin was 2.1%, 30 basis points better than the prior-year quarter. Net margin was 1.2%, 20 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $24.52 billion. On the bottom line, the average EPS estimate is $0.97.
Next year's average estimate for revenue is $99.36 billion. The average EPS estimate is $3.45.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 443 members out of 484 rating the stock outperform, and 41 members rating it underperform. Among 170 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 161 give Cardinal Health a green thumbs-up, and nine give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Cardinal Health is outperform, with an average price target of $46.37.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.