Cardinal Health issued the following announcement on Aug. 6.
Today reported fourth quarter fiscal year 2020 revenues of $36.7 billion, a decrease of 2 percent from the fourth quarter last year. GAAP operating earnings were $270 million and non-GAAP operating earnings were $442 million in the quarter, both of which include an estimated net negative impact of approximately $130 million due to the COVID-19 pandemic. GAAP diluted earnings per share (EPS) were $2.23, which included a pre-tax gain of $579 million related to the divestiture of a minority equity interest. Fourth quarter non-GAAP diluted EPS were $1.04.
Fiscal 2020 revenues were $152.9 billion, an increase of 5 percent from fiscal 2019. GAAP operating loss of $4.1 billion includes a $5.6 billion accrual in the first quarter related to opioid litigation. Non-GAAP operating earnings were $2.4 billion for the year. GAAP diluted loss per share for fiscal year 2020 was $12.61, while non-GAAP diluted EPS were $5.45.
"In fiscal 2020, we delivered on our commitments, grew operating earnings and exceeded our EPS guidance, despite the unprecedented global environment," said Mike Kaufmann, CEO of Cardinal Health. "We play an essential role in healthcare, and I'd like to thank our employees, especially our frontline teams, for their dedication under the challenging circumstances of the past several months. Our strong performance in fiscal 20 and the unwavering commitment of our employees will enable us to manage the complexities ahead, serve our customers and their patients, and continue our growth."
Q4 and full year FY20 summary
| Q4 FY20 | Q4 FY19 | Y/Y | FY20 | FY19 | Y/Y | |
| Revenue | $36.7 billion | $37.4 billion | (2)% | $152.9 billion | $145.5 billion | 5% |
| Operating earnings/(loss) | $270 million | $307 million | (12)% | $(4.1) billion | $2.1 billion | N.M. |
| Non-GAAP operating earnings | $442 million | $507 million | (13)% | $2.4 billion | $2.4 billion | 1% |
| Net earnings/(loss) attributable to
Cardinal Health, Inc. | $656 million | $194 million | N.M. | $(3.7) billion | $1.4 billion | N.M. |
| Non-GAAP net earnings attributable
to Cardinal Health, Inc. | $305 million | $334 million | (9)% | $1.6 billion | $1.6 billion | 1% |
| Effective Tax Rate | 19.4% | 18.4% | - | 2.1%2 | 22.1% | - |
| Non-GAAP Effective Tax Rate | 26.4% | 23.7% | - | 25.1% | 22.1% | - |
| Diluted EPS attributable to
Cardinal Health, Inc. | $2.23 | $0.65 | N.M. | $(12.61) | $4.53 | N.M. |
| Non-GAAP diluted EPS attributable
to Cardinal Health, Inc. | $1.04 | $1.11 | (6)% | $5.45 | $5.28 | 3% |
The COVID-19 pandemic adversely affected fourth quarter and fiscal year 2020 results. The negative impact was primarily due to the decline in volumes in both segments related to the cancellation or deferral of elective procedures and physician office visits. The company estimates that the COVID-19 pandemic had a net negative impact to both GAAP and non-GAAP operating earnings of approximately $130 million in the fourth quarter and approximately $100 million in fiscal year 2020.
Segment results
Pharmaceutical segment
| Q4 FY20 | Q4 FY19 | Y/Y | FY20 | FY19 | Y/Y | |
| Revenue | $33.2 billion | $33.4 billion | 0% | $137.5 billion | $129.9 billion | 6% |
| Segment profit | $359 million | $447 million | (20)% | $1.8 billion | $1.8 billion | (4)% |
Pharmaceutical segment profit decreased 20 percent to $359 million in the fourth quarter. This reflects expected COVID-19-related volume declines, which primarily affected Nuclear and Precision Health Solutions, as well as the company's generics program. Pharmaceutical Distribution customer contract renewals also adversely affected segment profit.
Medical segment
| Q4 FY20 | Q4 FY19 | Y/Y | FY20 | FY19 | Y/Y | |
| Revenue | $3.5 billion | $4.0 billion | (13)% | $15.4 billion | $15.6 billion | (1)% |
| Segment profit | $120 million | $97 million | 24% | $663 million | $576 million | 15% |
Medical segment profit increased 24 percent to $120 million in the fourth quarter due to benefits from cost savings initiatives and the beneficial comparison to a supplier-related charge in the prior year. This was partially offset by the adverse effects of COVID-19, primarily on products and distribution.
Fiscal year 2021 outlook1
- Non-GAAP earnings per share $5.25 - $5.65
- Interest and other $190M - $215M
- Non-GAAP effective tax rate 24.0% - 26.0%
- Diluted weighted average shares outstanding 292M - 296M
- Capital expenditures $400M - $450M
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.
Recent highlights
- Cardinal Health completed the divestiture of its remaining equity interest in naviHealth.
- Cardinal Health announced that David Evans, former interim Chief Financial Officer of Cardinal Health, joined the board of directors effective July 1. Mr. Evans previously served as executive vice president and CFO of Battelle Memorial Institute, and as executive vice president and CFO of Scotts Miracle-Gro.
- Cardinal Health board of directors approved a quarterly dividend of $0.4859 per share. The dividend will be payable on October 15, 2020 to shareholders of record at the close of business on October 1, 2020.
- Cardinal Health was named to the Human Rights Campaign (HRC) Best Places to Work for LGBTQ Equality for the twelfth consecutive year based on ratings in HRC's 2020 Corporate Equality Index.
- Morgan Stanley 18th Annual Global Healthcare Conference at 11:15 a.m. Eastern, Monday, September 14
Cardinal Health will host a webcast today at 8:30 a.m. Eastern to discuss fourth quarter and fiscal year results. To access the webcast and corresponding slide presentation, go to the Investor Relations page at ir.cardinalhealth.com. No access code is required.
Presentation slides and a webcast replay will be available until August 5, 2021.
Original source can be found here.
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