DUBLIN, Ohio , Feb. 5 /PRNewswire-FirstCall/ -- Cardinal Health, a global
provider of products and services that improve the safety and productivity of
health care, today reported solid fiscal second quarter results driven by top-
and bottom-line growth from its supply chain and medical product segments.
For the quarter ended Dec. 31, 2008 , revenue grew 8 percent to $25
billion, and non-GAAP earnings from continuing operations(1) increased 2
percent to $335 million. GAAP diluted earnings per share (EPS) from continuing
operations declined 1 percent to $0.88. The impact of special items,
impairments and other costs associated with the proposed spinoff of Clinical
and Medical Products (CMP) totaled $16 million after tax or $0.05 per share,
bringing non-GAAP diluted EPS from continuing operations(2) to $0.93, a 3
percent increase over the prior-year period.
"Despite a very challenging economic climate, we had solid growth from
both of our primary operating segments," said R. Kerry Clark , chairman and
chief executive officer of Cardinal Health. "HSCS returned to year over year
segment profit growth in the second quarter, and we expect to remain on track
with positive growth for the second half of the fiscal year. CMP continued its
track record of double-digit segment profit growth, though we continue to see
the deferral in hospital spending affecting its performance for the remainder
of the fiscal year. We are reaffirming our full-year guidance, adjusted on
Jan. 8 , of non-GAAP EPS of $3.50 to $3.60. In addition, we remain on track to
spin off the CMP businesses later this year and intend to file the Form 10
registration statement with the Securities and Exchange Commission during our
fiscal third quarter."
Healthcare Supply Chain Services
Healthcare Supply Chain Services increased revenue by 8 percent to $24.1
billion, driven by higher sales to existing pharmaceutical and medical supply
chain customers. Sales to bulk pharmaceutical customers(4) increased 15
percent to $11 billion and sales to non-bulk pharmaceutical customers(5)
increased 2 percent to $11 billion. Segment profit grew 6 percent to $333
million, primarily from an increased contribution from generic sales,
inflation from branded pharmaceuticals, the increase in total segment sales
volume and growth from nuclear pharmacy services. Segment profit growth was
partially dampened by previously reported pharmaceutical contract re-pricings
and continued disruption from anti-diversion efforts for pharmaceutical supply
chain customers. During the quarter, the company resumed shipments of
controlled substances from all distribution centers.
"We built upon the momentum from the first quarter and returned the
segment to growth during the quarter, with solid contributions from both the
pharmaceutical and medical supply chain businesses," said George Barrett ,
Cardinal Health vice chairman and chief executive officer of Healthcare Supply
Chain Services. "In addition to the pharmaceutical distribution business, our
nuclear pharmacy services and hospital supply businesses performed very well
in the quarter with strong profit growth. We remain on track to achieve our
goals for fiscal 2009."
Clinical and Medical Products
Revenue for Clinical and Medical Products increased 7 percent to $1.2
billion, primarily driven by organic growth from the dispensing, infusion and
infection prevention businesses and the Enturia acquisition. Segment revenue
was dampened by 3 percentage points due to foreign exchange rates during the
quarter. Segment profit increased 16 percent to $198 million, driven by
revenue growth, the Enturia acquisition and disciplined expense control.
Segment profit was significantly dampened by foreign exchange rates and
increased raw material costs.
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