Cardinal Health, Inc.

Cardinal Health, Inc. distributes pharmaceuticals, manufactures and distributes medical products, and provides home-health, nuclear-medicine and logistics services. It trades on the New York Stock Exchange under CAH. Its fiscal year ends June 30.

Quarterly financial results

Adjusted operating income excludes $23 million of restructuring, $182 million of amortization and other acquisition-related costs, and $94 million of acquisition-related cash and share compensation. It also removes $4 million of net asset-disposal gains and $47 million of litigation recoveries. The lower adjusted tax rate and share count supported EPS growth beyond operating-profit growth.

Pharmaceutical and Specialty Solutions revenue rose to $62.582 billion from $59.205 billion. Segment profit increased to $783 million from $667 million, helped by branded and specialty products and the generics program.

Global Medical Products and Distribution revenue was nearly flat at $3.190 billion, versus $3.184 billion. Profit fell to $33 million from $46 million, with distribution and currency pressure partly offset by own-brand growth. Other, comprising Nuclear and Precision Health Solutions, at-Home Solutions and OptiFreight Logistics, increased revenue to $1.764 billion from $1.641 billion and profit to $193 million from $166 million.

Annual outlook and earlier expectations

For fiscal 2027, adjusted EPS is now expected at $12.80 to $13, up from August's $12.40 to $12.60 range, which was reaffirmed October 1. The adjusted tax-rate forecast fell to 18.5% to 19.5% from 19% to 20%. Expected diluted shares fell to 231 million to 232 million from about 233 million.

The pharmaceutical segment's profit-growth target rose to 10% to 12% from 8% to 11%. Other's profit-growth target rose to 17% to 20% from 15% to 18%, and its revenue-growth range increased to 12% to 14% from 11% to 13%. The medical-products division's $200 million to $220 million profit target is unchanged.

Annual adjusted free cash flow remains $3.5 billion to $4 billion, capital spending about $700 million and buybacks about $1 billion. The 17% to 19% annual EPS growth range compares with fiscal 2026 adjusted EPS of $10.95 after removing a $0.31 tariff-refund benefit. Against reported adjusted EPS of $11.26, growth is about 14% to 15%. The refund was recognized in fiscal 2026, rather than the latest quarter.

Cash, debt and capital returns

Quarterly operating cash flow of $1.398 billion less $157 million of property and equipment spending leaves $1.241 billion, versus $865 million a year earlier. Cardinal's adjusted free cash flow of $1.583 billion adds back $338 million of net litigation payments and $4 million of liability-classified physician-unit repurchases.

Cash buybacks were $500 million and dividends $126 million. The accelerated buyback completed in September. The $5 billion authorization increase was approved in August; about $5.893 billion of authority remained at September 30.

Cash totaled $5.264 billion at September 30. Long-term obligations including the current portion and other short-term borrowings had an $8.815 billion carrying value, with $1.886 billion classified as current. The $4 billion commercial-paper program is backed by the same-size revolver; both were undrawn at September 30. The revolving facility replaced earlier facilities in August and matures in August 2031. After quarter-end, Cardinal entered a further $1 billion of uncommitted revolving facilities between October 29 and November 2.

Opioid-settlement liabilities were separately accrued at $3.9 billion. Cardinal paid $385 million related to opioid litigation during the quarter. Acquisition-related Specialty Alliance unit awards carried a separate $1.353 billion liability at September 30.

Completed and pending acquisitions

Cardinal completed the Solaris Health urology managed-services acquisition on November 3, 2025, for approximately $1.9 billion in cash, subject to adjustments. It also issued Specialty Alliance units to physicians and management; part of those awards is treated as compensation after the acquisition. Purchase-price allocation remains preliminary.

Strive Medical, a supplier focused on urology and other specialties, is also completed and was already included in the original August fiscal 2027 outlook. The purchase of AdaptHealth's Diabetes Health business remains pending, with closing expected in the third quarter of fiscal 2027. Both the original and current annual outlook reflect these deals.

In October, Cardinal signed a binding letter of intent to extend its pharmaceutical distribution agreements with CVS Health through June 2032.

Tax proceedings and developments to follow

Two IRS proposals received in fiscal 2026 remain relevant: a captive-insurance and loss-carryback dispute could create about $400 million of additional tax expense and $1.4 billion of tax liability, while a separate Patient Recovery restructuring proposal involves about $160 million of tax liability. The proposals predate the latest quarter and exclude interest; Cardinal maintains that its reserves are sufficient.

The key developments are drug and specialty-product growth, the medical-products recovery, acquisition integration, cash generation after settlement payments, and how much of the higher EPS target comes from operations as tax and share-count assumptions change.