Drug distributor Cardinal Health (NYSE:CAH) raised its earnings outlook for 2011 after it reported an 11 percent increase in the profits of its pharmaceuticals business unit in its fiscal second quarter.
Cardinal expects full-year earnings excluding one-time items of between $2.54 and $2.60 a share, up from a previous range of $2.38 to $2.48 a share.
The Dublin, Ohio, company reported second quarter earnings per share of 69 cents from continuing operations, 8 cents above the consensus analysts’ estimate. Earnings per share from continuing operations including one-time items stood at 61 cents. Those one-time items include acquisition-related costs, and prior-year gains from the sale of stock and a litigation benefit.
BioLabs Pegasus Park Cultivates Life Science Ecosystem
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“Overall we view the quarter’s results very positively,” said Lisa Gill, an analyst at J.P. Morgan in a research note, according to Reuters. “Operating metrics point to continued improvement in drug distribution as the company sells more generics to customers and continues to improve their customer mix.”
Sales in the quarter grew 2 percent to $25.4 billion. The company’s pharmaceuticals segment accounted for the vast majority of its revenues, $23.2 billion, up 2 percent compared to the like period last year. Profits in the segment grew 11 percent to $289 million.
Revenues in Cardinal’s medical products segment fell slightly to $2.2 billion.
In addition to its drug distribution business, Cardinal makes surgical gowns, gloves, scrubs, and surgical devices, plus other medical supplies.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Cardinal’s stock price was down slightly in mid-day trading at $41.55.
