By Siddhi Mahatole
April 30 Reuters) – Cardinal Health missed Wall Street expectations for third-quarter revenue, sending its shares down 8% on Thursday even though the company raised its profit forecast for the third time in the past four months.
Pharmaceutical revenue growth was hurt by Inflation Reduction Act-related changes that impacted the wholesale acquisition costs of drugs, said Chief Financial Officer Aaron Alt in a call with analysts.
Still, Cardinal Health’s adjusted quarterly profit of $3.17 per share beat estimates of $2.79, according to LSEG-compiled data.
Drug distributors have been benefiting from rising demand for biosimilars and high-margin medicines treating complex conditions such as cancer and autoimmune diseases.
Leerink Partners analyst Michael Cherny said “we are defending CAH shares as we see no good reason the stock should be off on today’s print absent some massive rotation move that we see as unwarranted.”
Popular weightloss drugs recorded growth of more than 30%, but the pace has slowed from earlier periods.
Total third-quarter revenue rose 11% to $60.9 billion, missing expectations of $61.7 billion.
Sales at its Pharmaceutical and Specialty Solutions unit climbed 11% to $56.1 billion, below estimates of $56.32 billion.
Cardinal Health has taken steps to mitigate the impact of tariffs, including cost‑cutting measures and price increases on affected products, though these actions have not fully offset the hit.
CEO Jason Hollar said the company has paid about $200 million in tariffs to date, mainly tied to products in its Global Medical Products and Distribution segment, where profit fell 36% to $25 million in the third quarter.
The Dublin, Ohio-based company now expects full-year adjusted profit per share between $10.7 and $10.8, compared with its prior view of $10.15 to $10.35. Analysts on average were expecting it to be $10.31 per share.
(Reporting by Siddhi Mahatole in Bengaluru; Editing by Devika Syamnath)
