2010 an ‘important transition year’ for Cardinal Health, CareFusion

DUBLIN, Ohio — Health services giant Cardinal Health completed its 2009 fiscal year with revenue down 11 percent from last year, and offered up-and-down predictions in 2010 for both itself and new spinoff CareFusion.

Cardinal announced full-year and fourth-quarter earnings on Tuesday. For the year, earnings per share dropped to $3.18 this year compared to $3.57 last year. Its earnings per share for the last three months of fiscal year 2009 were 74 cents, down from 88 cents in the previous fourth quarter, or about 16 percent.

The company attributed the decline in profit to hospital-spending cutbacks and the federal recall and manufacturing stoppage of some Alaris products.

Cardinal predicted “low single-digit revenue growth” and earnings per share between $1.90 to $2.00 next year. CareFusion, meanwhile, will in 2010 have per-share earnings between $1.10 and $1.20 — compared to adjusted earnings of $1.54 (that pro forma earnings number is broken out from Cardinal as if the split had already occurred). Cardinal stated that the decline in earnings for CareFusion will be due to R&D spending; higher compensation expenses; a higher tax rate from the end of a 2009 tax break; and infrastructure costs as a new public company.

The CareFusion spinoff remains scheduled for Aug. 31, Cardinal executives stated.

Revenue was up in 2010, according to the report. It increased to $25.2 billion from $22.9 billion in the fourth quarter — up 10 percent — while full-year revenue was up 9 percent: from 99.5 billion in 2009 compared to $91 billion the previous year. Revenue gains were in large part due to the Healthcare Supply Chain Services segment of the business, which includes areas include generic drugs and nuclear pharmacy. Revenue in the segment grew to $24.3 billion in the fourth quarter, up 11 percent from the previous year. Profit for the quarter was up 8 percent to $341 million.

“Fiscal 2009 saw accelerated investments to improve our ability to serve customers, as well as disciplined cost-containment measures, all of which will continue through an important transition year in fiscal 2010,” R. Kerry Clark, chairman and chief executive officer of Cardinal Health, stated in a company release. “With the improvement in the core businesses within the Healthcare Supply Chain Services segment and the resumption of customer installations for the Alaris System, both Cardinal Health and CareFusion have solid foundations and initiatives in place to position themselves for long-term success.”