Ohio-based drug distributor Cardinal Health (NYSE:CAH) said Tuesday that first quarter earnings rose, despite a drop in revenue, as the company reaffirmed its full year profit outlook.
The company reported net earnings from continuing operations of $272 million, or 79 cents per share, versus $237 million, or 68 cents per share, a year earlier.
Adjusted earnings from continuing operations were up 11 per cent to 81 cents, from 73 cents a year ago, beating analyst estimates by two cents.
Still, revenue in the latest quarter dropped 3 per cent to $25.9 billion, falling short of the $26.4 billion in sales expeced by Fact Set.
"As we had expected, revenue was down, as a result of the pharmaceutical industry's wave of brand-to-generic conversions. Our margin expansion continued to be strong, led by our pharmaceutical segment and fueled by excellent contribution from our generic programs," said chairman and CEO, George Barrett.
"Our medical segment started the year more slowly than we planned, largely due to lighter than expected procedure volumes and some continued operational cleanup of our major systems and process transformation."
Revenue for the pharmaceutical segment declined 4 percent to $23.5 billion, driven primarily by brand-to-generic conversions, partially offset by sales to new customers within pharmaceutical distribution and higher specialty solutions volume, the company said.
Segment profit increased 10 percent to $400 million, due to contribution from its generics programs.
Revenue for the medical unit was up just 1 percent to $2.4 billion, on account of one fewer sales day and lower sales to existing customers due in part to lower-than-expected procedural volume in the hospital market. Segment profit declined 6 percent to $74 million.
The company said it stood by its fiscal 2013 outlook for adjusted diluted earnings per share from continuing operations of between $3.35 to $3.50.
The company's board approved a further 16 per cent dividend increase.
"The just-announced decision to increase the dividend by another 16 percent underscores our commitment to a differentiated dividend. This adds to the 10.5 percent increase realized in July, bringing our anticipated annualized payout ratio to over 30 percent of our fiscal 2013 outlook for non-GAAP EPS," said Barrett.