Medical product distributor Cardinal Health Inc. reported a 29 percent decline in third-quarter earnings, but the company still beat analysts’ expectations and raised its outlook for the full year.
Earnings fell in part because last year’s results included CareFusion Corp., which Cardinal has since spun off. Excluding San Diego-based CareFusion, earnings grew about 5 percent to $225 million, or 62 cents per share. That beat the consensus analyst estimate of 57 cents a share.
Revenues grew a “lethargic” 1 percent to $24.3 billion, as 7 percent growth in Cardinal’s (NYSE: CAH) medical distribution business couldn’t make up for 0.5 percent growth in its much-larger pharmaceutical distribution business, according to a Bloomberg analyst who described Cardinal’s quarter as “mediocre.”
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The company upped its 2010 earnings projections to between $2.15 and $2.20 a share, after projecting a range of $2.08 to $2.18 in January.
“We expect earnings growth on a larger and more stable base,” CEO George Barrett said. “I’m feeling good about 2011. … The things we’ve done during the course of this year to position us have been productive and I think faster than we would have modeled.”
For fiscal 2011, Cardinal projects profits from continuing operations of $2.35 to $2.45, excluding special items. And those numbers may be too conservative, according to UBS analyst Steven Valiquette, who said he expects Cardinal’s profits from generic drugs will be greater than the company is projecting.