Cardinal Health (CAH) Stock Jumps as Guidance Hike Overshadows Mixed Quarter

TLDR

• Cardinal Health raised its fiscal-year adjusted EPS guidance to $10.70–$10.80, up from $10.15–$10.35.
• Adjusted Q3 EPS of $3.17 beat the $2.79 Wall Street estimate.
• Revenue rose 11% to $60.9 billion but missed the $62.1 billion consensus.
• Quarterly profit fell to $399 million from $506 million, hit by a $184 million goodwill impairment charge.
• CAH stock rose 1.6% in premarket trading Thursday.

Cardinal Health raised its full-year profit forecast for the second time this year, and Wall Street noticed. The stock climbed 1.6% in premarket trading Thursday to $205.99.

Cardinal Health, Inc., CAH

The company now expects adjusted earnings of $10.70 to $10.80 per share for fiscal 2026. That’s a clear step up from its February guidance of $10.15 to $10.35. Analysts had been expecting around $10.31 per share.

The guidance raise did a lot of heavy lifting. The underlying quarter was a mixed bag.

Adjusted EPS came in at $3.17, well ahead of the $2.79 estimate. That’s the kind of beat that gets attention.

Revenue, though, told a different story. Total sales rose 11% year-over-year to $60.9 billion, but that fell short of the $62.1 billion Wall Street had penciled in.

The pharmaceutical and specialty solutions segment drove most of the growth, posting $56.1 billion in revenue, up 11% from the same period last year.

The global medical products and distribution segment was a drag. Revenue there came in roughly flat versus a year ago, hurt by lower distribution volumes.

Profit Takes a Hit

Net profit dropped to $399 million from $506 million in the year-ago quarter. The culprit was a $184 million pretax goodwill impairment charge.

That charge was tied to Cardinal’s oncology practice alliance and its Integrated Oncology Network, a business it acquired in late 2024.

Goodwill impairments aren’t cash charges, but they do signal that an acquired asset isn’t performing as expected at purchase price. It’s not a number to ignore.

Evercore ISI analyst Elizabeth Anderson called the results “solid,” noting the pharmaceutical revenue miss was largely due to wholesale acquisition costs — a passthrough issue rather than a fundamental problem with the business.

Specialty Drug Demand Fuels Outlook

Cardinal, like peers Cencora and McKesson, is riding demand for high-margin specialty medicines. Drugs treating cancer and autoimmune diseases are a growing part of the distribution mix.

Biosimilar rollouts for off-patent blockbuster drugs are also adding to volume. These are areas where distributors can capture more value than in standard generics.

Cardinal has been expanding its footprint in specialty care through acquisitions of physician practices and specialty networks. The Integrated Oncology Network deal was part of that push.

That strategy hasn’t been without bumps — the impairment charge this quarter reflects that. But management is clearly sticking with the direction.

The full-year guidance raise, now the second in as many quarters, suggests confidence in the back half of the fiscal year.

Cardinal Health’s fiscal third quarter ended March 31. The stock was up 1.6% premarket at $205.99 at the time of reporting.

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