Cardinal Health Inc. (NYSE: CAH), a prominent healthcare services company, witnessed a notable surge in its stock price on Thursday as it announced second-quarter financial results that surpassed market forecasts and updated its fiscal 2026 guidance upward. The company reported adjusted earnings per share (EPS) of $2.63, outperforming the consensus estimate of $2.35.
Revenue in the quarter rose by 19% year-over-year to reach $65.63 billion, surpassing analyst expectations of $64.14 billion. Adjusted operating earnings also showed strong growth, increasing by 38% to $877 million.
Segment Performance Details
The Pharmaceutical and Specialty Solutions segment was a major contributor, delivering a 19% increase in second-quarter revenue to $60.7 billion. This growth was primarily driven by higher brand and specialty pharmaceutical sales, fueled by both existing and new customers. The segment's profit expanded by 29% to $687 million, a result of stronger sales of brand and specialty products, contributions from MSO platform acquisitions, and favorable performance in the generics program.
Separately, the Global Medical Products and Distribution segment saw revenue climb 3% to $3.3 billion. This improvement stemmed from increased volume from the company's existing customer base. Profitability in this division more than doubled, growing 106% to $37 million, supported by volume growth and the positive effects of cost optimization programs. This gain was partially offset by the negative impact of tariffs incurred during the quarter.
Outlook and Strategic Commentary
Jason Hollar, Chief Executive Officer of Cardinal Health, emphasized the underlying business strengths leading to the positive results. He noted, "Our strong second-quarter performance reflects at least double-digit segment profit growth across all five of our operating segments." He further highlighted that the company's ability to maintain momentum, alongside consistent execution of strategic priorities, has enabled the decision to raise the fiscal 2026 guidance.
Specifically, Cardinal Health increased its fiscal 2026 adjusted EPS guidance to a range between $10.15 and $10.35, signifying growth of 23% to 26%, compared to prior guidance of at least $10. Analysts' consensus stood at $10.01.
Within segment forecasts, the Pharmaceutical and Specialty Solutions segment's profit growth expectation was raised and narrowed to a range of 20% to 22%, up from the previous forecast of 16% to 19%. Moreover, the Global Medical Products and Distribution segment's projected profit has been increased to approximately $150 million, modestly up from the earlier guidance of at least $140 million.
Market Reaction
Following these announcements, shares of Cardinal Health advanced 9.11%, trading at $225.70 at the time of publication on Thursday. This price represents a new 52-week high for the stock, reflecting strong investor confidence amid the company’s optimistic financial outlook.
These results and forward guidance underscore the ongoing strength of Cardinal Health’s diversified operations and its capacity to deliver growth across multiple business units despite potential headwinds such as tariff challenges. The company’s strategic acquisitions and operational efficiencies continue to support this robust performance trajectory.