Pharma, Specialty Units Likely to Drive Cardinal Health's Q2 Earnings

Cardinal Health, Inc. CAH is scheduled to report second-quarter fiscal 2026 results on Feb. 05, before market open.

In the last reported quarter, the company’s adjusted earnings per share (EPS) of $2.55 surpassed the Zacks Consensus Estimate by 15.4%. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 9.36%.

CAH’s Estimate Picture

For second-quarter fiscal 2026, the Zacks Consensus Estimate for revenues is pegged at $64.49 billion, implying an improvement of 16.7% from the prior-year quarter’s reported figure.

The consensus estimate for EPS is pegged at $2.37, indicating an increase of 22.8% from the prior-year period’s reported number.

Let’s check out the factors that might have shaped CAH’s performance prior to the announcement.

Cardinal Health, Inc. Price and EPS Surprise

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

Factors to Note Before CAH’s Q2 Earnings Report

Cardinal Health’s revenue growth is expected to have remained strong, supported mainly by the Pharmaceutical and Specialty Solutions segment, which continues to see elevated utilization across branded, specialty, generic and consumer health products. Management highlighted sustained strength in industry utilization on its first-quarter earnings call, underpinned by demographic tailwinds, innovation in specialty therapeutics and expanding access to care.

Pharmaceutical and Specialty Solutions, Cardinal Health’s largest segment, is expected to have remained the key earnings driver. In the first quarter, segment revenues rose 23%, including a roughly six percentage point contribution from GLP-1 therapies, while profit increased 26%. These trends are likely to have persisted in the second quarter, supported by continued specialty growth in autoimmune, oncology and urology, as well as solid same-store generic unit volumes.

Contributions from MSO platforms and upstream BioPharma Solutions are also likely to have remained meaningful, particularly as Sonexus Access continues to secure new manufacturer contracts. COVID vaccine distribution is likely to have been weak during the second quarter, creating a modest year-over-year headwind. While the Solaris Health acquisition was closed in November, its profit contribution is anticipated to have been limited in the second quarter, with more meaningful benefits skewed to the back half of the year.

In Global Medical Products and Distribution (“GMPD”), performance is expected to have been mixed. First-quarter profit improved meaningfully on volume growth and improved execution. Per management, tariff-related costs will increase in the second quarter. While the business is expected to have remained profitable, year-over-year profit growth is unlikely. Strength in Cardinal Health–branded products, particularly in clinically differentiated categories such as compression, ECG, and surgical kits, should have helped offset some of the pressure, though tariffs are likely to have weighed on margins during the soon-to-be-reported quarter.

The Other segment — comprising at-Home Solutions, Nuclear and Precision Health Solutions, and OptiFreight Logistics — should continue to post outsized top and bottom-line growth. At-Home Solutions must have benefited from strong secular demand and early synergy realization from the ADS acquisition, while Nuclear and Precision Health is likely to have seen rapid adoption of theranostics, with revenue growth well above market rates. OptiFreight’s volume momentum and technology-driven offerings should have sustained double-digit growth.

Higher interest expense related to recent and pending acquisitions, along with the incremental impact of tariffs, might have tempered EPS growth sequentially. Strong demand, favorable specialty mix and disciplined cost control should support solid second-quarter results, keeping Cardinal Health on track to meet its fiscal 2026 EPS guidance of at least $10.00.

Earnings Beat Likely

Our proven model predicts an earnings beat for Cardinal Health this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($2.38 per share) and the Zacks Consensus Estimate ($2.37), is +0.46%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: CAH carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

CAH’s Share Price Performance

Over the past six months, Cardinal Health’s shares have gained 35.6%, outperforming the industry’s 16.9% growth. CAH’s shares have also underperformed the Zacks Medical sector’s 5% increase and the S&P 500’s 12.2% gain during the period.

Other Stocks Worth a Look

Here are some other medical product stocks worth considering, as these too have the right combination of elements to post an earnings beat this reporting cycle.

Masimo MASI has an Earnings ESP of +8.04% and a Zacks Rank #2 at present. The company is set to release fourth-quarter 2025 results on Feb. 26.

MASI’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 12.39%. The Zacks Consensus Estimate for MASI’s fourth-quarter EPS indicates a decline of 20.6% from the year-ago reported figure.

Merit Medical MMSI has an Earnings ESP of +2.09% and a Zacks Rank of 2 at present. The company is set to release second-quarter fiscal 2026 results on Feb. 24.

MMSI’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 14.09%. The Zacks Consensus Estimate for MMSI’s fourth-quarter EPS implies an improvement of 3.2% from the year-ago reported figure.

DexCom DXCM has an Earnings ESP of +4.75% and a Zacks Rank of 3 at present. The company is slated to release fourth-quarter 2025 results on Feb. 12.

DXCM’s earnings surpassed estimates in two of the trailing four quarters and missed in the other two, the average surprise being 0.17%. The Zacks Consensus Estimate for DXCM’s fourth-quarter EPS calls for a gain 44.4% from the year-ago reported figure.

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

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