5 Must-Read Analyst Questions From Cardinal Health's Q2 Earnings Call

Cardinal Health’s second quarter results were met with a significant negative market reaction, largely due to flat sales and a notable miss on adjusted EBITDA versus Wall Street expectations. Management cited robust demand in pharmaceutical distribution and growth in specialty services, but also acknowledged that individually small, unexpected expenses and ongoing cost pressures weighed on the bottom line. CEO Jason Hollar highlighted operational efficiencies and the impact of recent acquisitions, but the quarter’s performance reflected the challenge of offsetting customer contract losses and external cost headwinds. CFO Aaron Alt noted that gross profit growth outpaced expenses, but investments and acquisition integration increased SG&A costs.

Is now the time to buy CAH? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Cardinal Health’s Q2 Earnings Call

• Lisa Gill (JPMorgan) asked about the sources of the updated guidance increase in Pharmaceutical and Specialty Solutions. CFO Aaron Alt explained roughly half came from accounting changes and half from improved expectations in Pharma and Other businesses.

• Allen Lutz (Bank of America) questioned the drivers behind the rise in SG&A expenses. Alt attributed most of the increase to recent acquisitions and ongoing investments in technology, offset by cost optimization efforts.

• Erin Wright (Morgan Stanley) inquired about utilization trends and tariff mitigation in GMPD. CEO Jason Hollar confirmed utilization remained steady and detailed ongoing operational actions to offset most tariff impacts, with some costs passed on through pricing.

• Eric Percher (Nephron Research) asked about capabilities gained through the Solaris acquisition. Hollar emphasized the deal’s expansion of multi-specialty managed services and diverse revenue streams, while Alt provided additional details on financial accretion and strategic fit.

• Daniel Grosslight (Citi) raised concerns about pricing headwinds in at-Home Solutions from potential competitive bidding. Hollar noted less than 15% of Medicare revenue in the segment is exposed and expressed confidence in the company’s ability to manage reimbursement risk through its diverse product and payer mix.

Catalysts in Upcoming Quarters

In the quarters ahead, the StockStory team will watch (1) the pace and profitability of specialty platform expansion following the Solaris Health acquisition, (2) the company’s ability to deliver margin improvements through automation and cost control in GMPD and at-Home Solutions, and (3) management’s response to ongoing tariff and regulatory developments. Execution on acquisition integration and the ramp-up of new distribution capabilities will also be key markers of progress.

Cardinal Health currently trades at $148, down from $157.89 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).

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