Cardinal Health issued the following announcement on Feb. 6.
Cardinal Health today reported financial results for the second quarter of fiscal 2020 ended December 31, 2019. Second quarter revenue was $39.7 billion, an increase of 5% from the second quarter of last year.
Second quarter GAAP operating earnings decreased 34% to $334 million, which included a $96 million charge in connection to the recently announced voluntary surgical gown-related recalls. Non-GAAP operating earnings increased 1% to $646 million. GAAP diluted earnings per share (EPS) decreased 19% to $0.75, while non-GAAP diluted EPS increased 18% to $1.52. Non-GAAP diluted EPS benefited from a lower effective tax rate and a lower share count.
"With the first half of the year behind us, we are raising our fiscal year 2020 guidance," said Mike Kaufmann, CEO of Cardinal Health. "This increase was driven by improved performance across our Pharmaceutical segment, particularly within our generics program. As we look forward, we remain focused on executing our strategic growth initiatives."
Q2 FY20 summary
| Q2 FY20 | Q2 FY19 | Y/Y | |
| Revenue | $39.7 billion | $37.7 billion | 5% |
| Operating earnings |
$334 million |
$504 million |
(34)% |
| Non-GAAP operating
earnings | $646 million | $637 million | 1% |
| Net earnings
attributable to Cardinal Health, Inc. | $220 million | $280 million | (21)% |
| Non-GAAP net
earnings attributable to Cardinal Health, Inc. | $448 million | $385 million | 16% |
| Diluted EPS
attributable to Cardinal Health, Inc. | $0.75 | $0.93 | (19)% |
| Non-GAAP diluted
EPS attributable to Cardinal Health, Inc. | $1.52 | $1.29 | 18% |
Pharmaceutical segment
| Q2 FY20 | Q2 FY19 | Y/Y | |
| Revenue | $35.7 billion | $33.7 billion | 6% |
| Segment
profit | $462 million | $443 million | 4% |
Pharmaceutical segment profit increased 4% to $462 million in the second quarter, reflecting positive performance in the company's generics program and Specialty Solutions business. This was partially offset by the adverse impact of Pharmaceutical Distribution customer contract renewals.
Medical segment
| Q2 FY20 | Q2 FY19 | Y/Y | |
| Revenue | $4.0 billion | $4.0 billion | 0% |
| Segment
profit | $195 million1 | $188 million | 4% |
| 1Medical segment profit does not include the $96 million charge incurred for inventory write-offs and certain remediation and supply disruption costs associated with the recently announced voluntary surgical gown-related recalls. |
Medical segment profit increased 4% to $195 million in the second quarter. This increase reflects benefits from cost savings initiatives, partially offset by a decline in products and distribution.
Tax rate
During the second quarters of fiscal 2020 and 2019, GAAP effective tax rates were 21.0% and 31.0%, respectively. Non-GAAP effective tax rates were 24.8% and 28.5%, respectively. The GAAP effective tax rate benefitted from jurisdictional mix and discrete items recognized in the second quarter of 2020, largely driven by changes as a result of tax reform. The Non-GAAP effective tax rate benefitted from jurisdictional mix.
Fiscal year 2020 outlook
The company does not provide forward-looking guidance on a GAAP basis as certain financial information, the probable significance of which cannot be determined, is not available and cannot be reasonably estimated. See "Use of Non-GAAP Measures" following the attached schedules for additional explanation.
The company raises its fiscal year 2020 guidance range for non-GAAP diluted earnings per share attributable to Cardinal Health, Inc. to the range of $5.20 to $5.40 from the range of $4.85 to $5.10.
Original source can be found here.
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