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Cardinal Health, Inc. (NYSE: CAH) is a global leader in integrated healthcare services and products. With nearly 100 years of experience, the company stands as a pillar in the healthcare industry, ranking among the top 25 on the Fortune 500 list. Cardinal Health offers a comprehensive suite of services that cater to hospital systems, pharmacies, ambulatory surgery centers, clinical laboratories, and physician offices worldwide.
Operating through two main segments—Pharmaceuticals and Medical—Cardinal Health provides clinically-proven medical products and pharmaceuticals, alongside cost-effective solutions that enhance supply chain efficiency. The company is a major distributor of branded, generic, and specialty pharmaceutical products to a wide array of clients, including retail chains, independent pharmacies, hospital networks, and healthcare providers.
Recently, Cardinal Health reported strong financial results for Q2 FY2024, with a 12% increase in revenue to $57.4 billion. The company also saw significant growth in both its Pharmaceutical and Medical segments, driven by robust sales of brand and specialty pharmaceuticals, as well as improvements in at-Home Solutions and Global Medical Products and Distribution. CEO Jason Hollar highlighted the company's operational execution and strategic priorities, which include tech-enabled specialty acquisitions and a focus on supply chain resiliency.
Cardinal Health is also committed to sustainability and corporate responsibility. The company recently released its Fiscal 2023 Environmental, Social and Governance (ESG) Report, emphasizing long-term value creation through sustainable practices. The company has received approval from the Science Based Targets initiative (SBTi) for its ambitious greenhouse gas (GHG) emissions reduction targets. By FY2023, Cardinal Health had already reduced its Scope 1 and 2 emissions by 13% from a FY2019 base year.
In terms of infrastructure, Cardinal Health is expanding its logistics capabilities. The company has commenced construction on a new 350,000 square-foot Consumer Health Logistics Center in Columbus, Ohio, designed to support the distribution of over-the-counter consumer health products. This facility, expected to be operational by Summer 2025, will create approximately 100 new jobs and enhance Cardinal Health's supply chain agility.
Despite challenges such as the non-renewal of its pharmaceutical distribution contracts with OptumRx, Cardinal Health remains resilient. The company reaffirmed its fiscal 2024 non-GAAP diluted EPS guidance and is confident in its long-term growth targets.
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On September 20, 2021, Cardinal Health (NYSE: CAH) announced a goal to reduce Scope 1 and Scope 2 greenhouse gas emissions by 50% by 2030. This commitment aligns with the Paris Agreement's climate goals. The company also plans to validate its Scope 3 emissions targets through the Science-Based Targets initiative. Environmental highlights include powering its global headquarters with renewable energy and expanding its Total Waste Management initiative, achieving significant waste reduction. Cardinal Health aims to enhance diversity by increasing the representation of women and underrepresented groups by 2030.
AmerisourceBergen (ABC), Cardinal Health (CAH), and McKesson (MCK) announced progress on the opioid claims settlement involving U.S. states and territories. As of August 21, 2021, 42 states, 5 territories, and Washington, D.C. have joined the settlement, allowing the process to move forward. This next phase includes a 120-day period for political subdivisions to join, ending January 2, 2022. If enough subdivisions participate, the settlement will take effect 60 days after that. The companies aim to focus on secure medication delivery while providing relief to affected communities.
Cardinal Health (CAH) unveiled a new talent strategy aimed at enhancing diversity in leadership roles by 2030. Key goals include increasing the representation of African American and Black employees to 11% and Asian, Latinx, Indigenous, and other diverse groups to 23% among managers. Additionally, the global representation of women in leadership is set to rise to 48%. The strategy focuses on recruitment, development, and retention of diverse talent, including programs for underrepresented groups. The initiative is supported by enhanced DEI metrics in compensation plans, underscoring its significance for long-term growth.
Cardinal Health (CAH) announced an irrevocable early redemption of its outstanding 2.616% notes due June 2022, totaling $572,171,000. The redemption date is set for September 15, 2021. This measure aligns with the terms outlined in the June 2, 2008 indenture, allowing the redemption at greater of 100% principal or the present value of remaining scheduled payments. The company emphasizes this does not constitute a sale or solicitation of securities. Cardinal Health is a leading distributor of pharmaceuticals and medical products.
Cardinal Health (NYSE: CAH) has extended its partnerships with CVS Health for pharmaceutical distribution until June 30, 2027. CEO Mike Kaufmann emphasized the value of this long-standing collaboration, which enhances the delivery of healthcare products. The company maintains its fiscal year 2022 earnings guidance at a non-GAAP diluted EPS of $5.60 to $5.90. This agreement underscores Cardinal Health's critical role in the healthcare supply chain and its commitment to meeting customer needs through innovative solutions.
Cardinal Health (NYSE: CAH) has announced its collaboration with Abbott and Quidel to enhance access to over-the-counter COVID-19 tests. This initiative utilizes Cardinal Health's distribution network to provide consumers with Abbott's BinaxNOW™ and Quidel's QuickVue® antigen tests. According to company representatives, these rapid tests will support safe reopening efforts amid rising COVID-19 cases, especially the Delta variant. The company aims to expand its laboratory products portfolio, facilitating testing solutions for various sectors, including workplaces and schools.
Cardinal Health reported a 16% increase in fourth-quarter fiscal 2021 revenue to $42.6 billion, with full-year revenue at $162.5 billion, a 6% growth. However, operating earnings were adversely affected by a $197 million inventory reserve for PPE and $1.17 billion in opioid-related charges, leading to a 40% drop in GAAP operating earnings and diluted EPS of $0.40. Despite challenges, the company identified $250 million in cost savings and projects a non-GAAP EPS of $5.60 - $5.90 for fiscal 2022.
Cardinal Health has finalized the sale of its Cordis business to Hellman & Friedman for approximately $1 billion. This sale includes the assumption of certain liabilities and retention of specific working capital accounts. CEO Mike Kaufmann emphasized the company's strategic portfolio evaluation approach and commitment to growth, while H&F's CEO Shar Matin expressed excitement about Cordis's independent future and innovative product offerings. Cardinal Health will report its fiscal year 2021 results on August 5, prior to market opening.
AmerisourceBergen (ABC), Cardinal Health (CAH), and McKesson (MCK) announced a proposed settlement addressing the majority of opioid lawsuits from state and local entities. The settlement, contingent on participation from states and political subdivisions, could provide up to $21 billion over 18 years. Contributions include $6.4 billion from each AmerisourceBergen and Cardinal Health, and $7.9 billion from McKesson. The settlement is seen as a step towards resolving opioid claims, with strong legal defenses maintained in pending litigation if not finalized.
AmerisourceBergen, Cardinal Health, and McKesson have agreed to pay up to $1.179 billion to settle opioid-related claims with New York and its subdivisions, including Nassau and Suffolk Counties. This settlement is part of ongoing negotiations for a broader resolution concerning claims from various states. The distributors will receive claims dismissal in exchange for the settlement amount and associated legal fees. While disputing the allegations, the companies view this as a step toward focusing resources on safe medication delivery and supporting affected communities.
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