CAH Q1 Earnings Beat Estimates, '26 EPS View Up, Stock Gains

Cardinal Health, Inc. CAH reported first-quarter fiscal 2026 adjusted earnings per share (EPS) of $2.55, which beat the Zacks Consensus Estimate of $2.21 by 15.4%. The bottom line also improved 35.6% year over year.

GAAP EPS in the quarter was $1.88 compared with $1.70 in the year-ago period.

Revenue Details

Sales were up 22% on a year-over-year basis to $64 billion. The top line beat the Zacks Consensus Estimate by 8.4%.

Cardinal Health, Inc. Price, Consensus and EPS Surprise

Cardinal Health, Inc. price-consensus-eps-surprise-chart | Cardinal Health, Inc. Quote

Segmental Analysis

Pharmaceutical and Specialty Solutions

Pharmaceutical revenues were up 23% to $59.2 billion on a year-over-year basis. This growth was driven by branded and specialty pharmaceutical sales growth from existing and new Pharmaceutical Distribution and Specialty Solutions customers.

Pharmaceutical profit totaled $667 million, up 26% from the year-ago period’s level. The upside was driven by growth in brand and specialty products and MSO platforms (including GI Alliance), and contributions from positive generics program performance.

Global Medical Products and Distribution

Revenues in this segment totaled $3.2 billion, up 2% year over year, driven by growth volume from existing customers.

The segment reported a profit of $46 million compared with $8 million in the year-ago quarter.

Other

This segment includes three operating segments — at-Home Solutions, Nuclear and Precision Health Solutions, and OptiFreight Logistics. Sales totaled $1.6 billion, up 38% year over year.

The segment’s profit amounted to $166 million, up 60% from the year-ago level. The upside was driven by robust performance across the three operating segments.

Margin Analysis

Gross profit increased 22% year over year to $2.32 billion.

As a percentage of revenues, the gross margin in the reported quarter was 3.6%, almost flat year over year.

Distribution, selling, general and administrative expenses totaled $1.46 billion, up 14% year over year.

Operating income amounted to $668 million, up 18% year over year. Adjusted operating income increased 37.1% year over year to $857 million.

Financial Update

The company exited the reported quarter with cash and cash equivalents of $4.59 billion compared with $3.87 billion in the fiscal fourth quarter of 2025.

Net cash provided by operating activities totaled $973 million against $1.65 billion in net cash used in the year-ago period.

2026 View Raised

Cardinal Health raised its fiscal 2026 earnings guidance. The company anticipates adjusted EPS to be between $9.65 and $9.85, up from the previously issued preliminary outlook of $9.30-$9.50. The Zacks Consensus Estimate for the same is pegged at $9.45.

The company expects revenues from its Pharmaceutical segment to grow 11-13% year over year. Segmental profit is also likely to increase 16-19%.

Revenues from the Medical segment are estimated to grow 2-4%. Segmental profit is expected to be at least $140 million.

Revenues from the Other segment are likely to grow 26-28%. Segmental profit is expected to increase 29-31%.

Conclusion

Cardinal Health reported robust first-quarter fiscal 2026 results, with earnings and sales beating estimates. Quarterly results were marked by broad-based profit growth across all operating segments. Pharmaceutical and Specialty Solutions benefited from robust brand and specialty drug sales, excluding the impact of a major contract expiration, while Global Medical Products and Distribution posted double-digit profit gains on higher volumes. The Other segment also saw significant expansion, supported by acquisitions and growth in at-Home Solutions, Nuclear and Precision Health Solutions, and logistics services.

Following positive results, shares of CAH were up 10% in pre-market trading. The company’s shares have gained 39.1% so far this year compared with the industry’s 4.1% increase. The S&P 500 Index has gained 18.6% in the period.

Management’s ability to drive profitability while investing in strategic initiatives underscores the resilience and diversification of Cardinal Health’s business model. Ongoing progress in technology integration, supply-chain optimization, and specialty platform expansion further strengthen the company’s competitive positioning. With solid momentum across all five segments and a raised full-year outlook, Cardinal Health enters the remainder of fiscal 2026 with confidence.

CAH’s Zacks Rank and Stocks to Consider

Cardinal Health carries a Zacks Rank #3 (Hold) at present.

Some better-ranked stocks in the broader medical space are Solventum Corporation SOLV, Boston Scientific Corporation BSX and HealthEquity HQY.

Solventum, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 4.1%. SOLV’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 13.91%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Solventum’s shares have gained 8.2% compared with the industry’s 6.2% growth so far this year.

Boston Scientific, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 14%. BSX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 8.1%.

Boston Scientific’s shares have gained 13.2% compared with the industry’s 5.6% growth so far this year.

HealthEquity, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 21.7%. HQY’s earnings surpassed estimates in three of the trailing four quarters and missed once, with the average surprise being 11.05%.

HealthEquity’s shares have risen 0.6% compared with the industry’s 6.2% growth so far this year.

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This article originally published on Zacks Investment Research (zacks.com).

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