U.S. markets close in 27 minutes
  • S&P 500

    -106.41 (-2.76%)
  • Dow 30

    -643.33 (-2.08%)
  • Nasdaq

    -400.31 (-2.94%)
  • Russell 2000

    -32.66 (-1.52%)
  • Crude Oil

    +0.01 (+0.02%)
  • Gold

    -11.90 (-0.64%)
  • Silver

    -0.34 (-1.32%)

    -0.0063 (-0.52%)
  • 10-Yr Bond

    -0.0260 (-2.50%)

    -0.0053 (-0.39%)

    +0.5600 (+0.54%)

    -740.06 (-2.30%)
  • CMC Crypto 200

    -8.13 (-1.27%)
  • FTSE 100

    -86.64 (-1.30%)
  • Nikkei 225

    +89.03 (+0.31%)

Cardinal Health (CAH) to Post Q1 Earnings: What's in Store?

Zacks Equity Research
·4 min read

Cardinal Health, Inc. CAH is scheduled to report first-quarter fiscal 2021 results on Nov 5, before the opening bell.

In the last reported quarter, the company delivered an earnings surprise of 14.3%. It beat estimates in each of the trailing four quarters, the average surprise being 17.4%.

Q1 Estimates

For the fiscal first quarter, the Zacks Consensus Estimate for earnings is pegged at $1.10 per share, indicating a decline 13.4% from the prior-year quarter. The same for revenues stands at $38.48 billion, suggesting growth of 3.1% from the year-ago reported figure.

Factors to Note

Cardinal Health’s Pharmaceutical segment is the second largest pharmaceutical distributor in the United States. Elective procedures and physician office visits are expected to recover to pre-COVID 19 levels exiting fiscal 2021, with a more substantial impact in the first half of the year. This might get reflected in the segment’s results in the to-be-reported quarter.

In fact, higher contribution from key growth areas — Specialty and Connected Care — and sustained dynamics within its generics program are likely to have contributed to the segment’s fiscal first-quarter results.

Notably, for the fiscal first quarter, the Zacks Consensus Estimate for the unit’s revenues stands at $34.75 billion, suggesting an improvement of 3.9% from the year-ago quarter.

Cardinal Health, Inc. Price and EPS Surprise

Cardinal Health, Inc. Price and EPS Surprise
Cardinal Health, Inc. Price and EPS Surprise

Cardinal Health, Inc. price-eps-surprise | Cardinal Health, Inc. Quote

Also, Cardinal Health’s Medical unit may have contributed significantly to the overall fiscal first-quarter results. In fact, the segment manufactures products such as single-use surgical drapes, gowns and apparel, exam and surgical gloves, which might have benefited sales in the to-be-reported quarter.

Moreover, the company has been committed toward improving efficiencies across its Medical segment by refining commercial, operational and data capabilities. We anticipate these to get reflected in the fiscal first-quarter results.

The company may have gained from its cost savings initiative related to actions intended to optimize and simplify the company's operating model and cost structure. This, in turn, might have aided the company’s margins in the to-be-reported quarter.

Further, the Cardinal Health’s diversified product portfolio is likely to have contributed to the fiscal first-quarter performance.

However, stiff competition in each of the company’s business segments may have weighed on the segment margins and consequently, might impede profitability in the fiscal first quarter.

Here’s What the Quantitative Model Suggests

Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is the case here.

Earnings ESP: Cardinal Health has an Earnings ESP of +3.40%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #3.

Other Stocks Worth a Look

Here are some other medical stocks worth considering as these too have the right combination of elements to post an earnings beat this quarter.

Zimmer Biomet Holdings, Inc. ZBH has an Earnings ESP of +4.10% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Canopy Growth Corporation CGC has an Earnings ESP of +7.55% and a Zacks Rank of 3.

Orthofix Medical Inc. OFIX has an Earnings ESP of +42.86% and a Zacks Rank of 3.

Legal Marijuana: An Investor’s Dream

Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.

Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.

Download Marijuana Moneymakers FREE >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
ORTHOFIX MEDICAL INC. (OFIX) : Free Stock Analysis Report
Cardinal Health, Inc. (CAH) : Free Stock Analysis Report
Zimmer Biomet Holdings, Inc. (ZBH) : Free Stock Analysis Report
Canopy Growth Corporation (CGC) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research