Cardinal Health raises 2024 profit forecast on drug distribution strength
Aug 15 (Reuters) - Drug distributor Cardinal Health Inc raised its 2024 profit forecast on Tuesday, as it sees strong demand for specialty and generic medicines to continue to boost sales in its pharmaceuticals unit.
Drug distributors like rival AmerisourceBergen have been benefiting from sales of highly priced specialty medicines that treat diseases including cancer and rheumatoid arthritis, while COVID-19-related sales keep falling.
On an adjusted basis, Cardinal Health expects to earn in the range of $6.50 to $6.75 per share in 2024, compared to the preliminary forecast in the range of $6.45 to $6.70 per share. Analysts on average were expecting $6.59 per share, according to Refinitiv data.
The Ohio-based company, which also beat Wall Street estimates for fourth-quarter profit, expects revenue from its pharmaceuticals unit to rise by 10% to 12% during financial year 2024, driven by continued demand for weight-loss medications.
However, weight-loss drugs do not contribute meaningfully to the segment profit, the company said.
Revenue from the company's pharmaceuticals unit, through which it distributes branded and generic drugs, specialty medicines and over-the-counter healthcare and consumer products, rose 15% year-over-year, to $49.7 billion, in the fourth quarter ended June 30.
In contrast, the medical unit, through which Cardinal Health makes and distributes company-branded medical, surgical and laboratory products - including specimen collection kits and wheelchairs - posted flat year-over-year sales, at $3.76 billion, due to lower demand for Personal Protective Equipment (PPE) kits.
Total sales came in at $53.45 billion, beating analysts' average estimate of $52.72 billion, according to Refinitiv IBES data.
Excluding one-off items, Cardinal Health reported a profit of $1.55 per share, topping expectations of $1.49 per share. (Reporting by Vaibhav Sadhamta and Mariam Sunny in Bengaluru; Editing by Pooja Desai)
