Cardinal Health, Inc. (CAH) Earnings

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Sep 2026upcoming

Next quarter

Reports Oct 29, 2026.

Consensus is $2.92 EPS for Sep 2026 across 5 estimates, ranging $2.88 to $2.96.

CAH Jun 2026

Reported Aug 11, 2026 · before the open

: 20.25%

: $2.42
: $2.91
: —
: —

Highlights

EPS beat: Fourth-quarter diluted EPS was $2.91, 20.25% above the $2.42 consensus estimate.
Annual earnings growth: Fiscal 2026 GAAP diluted EPS rose 12% to $7.23, while non-GAAP diluted EPS increased 37% to $11.26.
Revenue scale: Fiscal 2026 revenue increased 14% to $254.2 billion, led by a 15% increase in Pharmaceutical and Specialty Solutions revenue to $234.8 billion.
Pharma performance: Fiscal 2026 Pharma segment profit increased 23% to $2.8 billion, supported by branded and specialty pharmaceuticals, the generics program and MSO acquisitions.
Acquisition contribution: Solaris Health added a 750-provider, 250-location urology platform; Cardinal paid approximately $1.9 billion in cash and owns about 76% of The Specialty Alliance.
Tariff accounting benefit: Cardinal recorded a roughly $200 million receivable for expected IEEPA tariff refunds in the fourth quarter, producing an approximately $100 million net operating-earnings benefit in the quarter.
Medical segment recovery: GMPD segment profit rose 91% to $258 million for fiscal 2026, although revenue was essentially flat at $12.7 billion and tariff and supply-chain pressures remain.
Cash generation and capital allocation: Operating cash flow was $5.2 billion in fiscal 2026; the company spent $1.9 billion on Solaris, $1.4 billion on share repurchases, $649 million on capital expenditures and $491 million on dividends.
Balance-sheet and litigation obligations: Debt and other short-term borrowings totaled $8.9 billion at June 30, while opioid-related accrued liabilities stood at $4.3 billion and future settlement payments are expected through 2038.

Analysis

Cardinal Health finished fiscal 2026 with fourth-quarter diluted EPS of $2.91, well above the $2.42 consensus estimate. The supplied materials do not provide fourth-quarter revenue, operating income or a directly comparable fiscal 2025 fourth-quarter EPS; the latest on-file fiscal 2026 quarterly comparison is Q1 EPS of $1.88. At the full-year level, however, revenue rose 14% to $254.2 billion, operating income increased 15% to $2.6 billion and net income attributable to Cardinal rose to $1.7 billion from $1.6 billion. GAAP diluted EPS reached $7.23 from $6.45, while non-GAAP EPS rose to $11.26 from $8.24.

The print was defined by continued strength in Pharma, the earnings contribution from the recently assembled MSO portfolio and a favorable fourth-quarter tariff accounting item. Pharma profit increased 23% to $2.8 billion as branded and specialty pharmaceutical sales and the generics program improved; GLP-1 demand lifted revenue but did not meaningfully contribute to profit. Solaris and other MSO acquisitions also lifted results, though acquisition-related compensation and amortization increased. The approximately $100 million net fourth-quarter operating benefit from expected IEEPA tariff refunds was material to the period, while the $184 million Navista & ION goodwill impairment and $122 million Outcomes investment impairment underscore execution and portfolio risks.

Pharma growth engine

Pharmaceutical and Specialty Solutions remained the central driver of the fiscal 2026 result. Revenue increased 15% to $234.8 billion and segment profit rose 23% to $2.8 billion. Management attributed the profit improvement to branded and specialty pharmaceutical growth, the generics program and the contribution from MSO platforms.

Branded and specialty drugs: Growth from existing and new customers drove most of the Pharma revenue increase. The company said GLP-1 demand increased during fiscal 2026 and supported revenue, but did not meaningfully contribute to segment profit; demand growth also began to moderate.
Generics: The generics program was a positive year-over-year contributor, reflecting launches, customer volumes, pricing, Red Oak Sourcing with CVS Health and sourcing costs. Cardinal cautioned that generic volumes, pricing and contract renewals remain difficult to predict.
Margin mix: Fiscal 2026 consolidated gross margin rose 20% to $9.8 billion, while the gross-margin rate expanded 17 basis points. Higher branded pharmaceutical distribution sales were dilutive to the overall rate because of their lower margin profile.

MSO acquisition buildout

Cardinal continued to shift toward specialty physician-practice support through The Specialty Alliance and Navista. Solaris Health, acquired in November 2025, expanded the platform with more than 750 providers across over 250 locations in 14 states. Cardinal paid approximately $1.9 billion in cash and owns roughly 76% of The Specialty Alliance.

Portfolio contribution: The Specialty Alliance’s fiscal 2026 results benefited from the acquisitions of GI Alliance and Solaris Health, while Other segment profit also benefited from the ADS acquisition.
Cost of expansion: Acquisition-related cash and share-based compensation costs increased to $287 million from $126 million, primarily because of the timing of Specialty Alliance acquisitions. Amortization and other acquisition-related costs were $469 million.
Execution signal: Cardinal recorded a $184 million pre-tax goodwill impairment for Navista & ION in the third quarter after reducing long-term plan assumptions and increasing the business’s risk profile. The company said further adverse changes in forecasts, discount rates or growth assumptions could create additional impairment risk.

Tariff refund benefit

The fourth quarter included an unusual benefit related to tariffs imposed under the International Emergency Economic Powers Act. Cardinal had paid approximately $200 million in IEEPA tariffs, primarily on GMPD products, and recorded a receivable for the expected government refund.

Fourth-quarter impact: Recording the approximately $200 million receivable, alongside an expected repayment to customers, produced an approximately $100 million net benefit to operating earnings for the three months ended June 30, 2026.
Full-year effect: The net operating-earnings impact was immaterial for fiscal 2026 because tariff expense and the refund benefit were recognized at different times.
Remaining exposure: Cardinal continues to face tariffs under other authorities and said its cost reductions and customer price increases have not fully offset the impact. Potential pharmaceutical tariffs could also affect costs or supply.

GMPD and Other segments

The Global Medical Products and Distribution segment improved materially on profit despite limited top-line growth. GMPD revenue was $12.7 billion, up 1%, while segment profit increased 91% to $258 million, primarily through growth from existing customers and the net tariff effect.

GMPD: The segment continued to contend with higher supply-chain and tariff costs, lower distribution volumes and pricing pressure. Cardinal is using cost optimization, price increases and surcharges to mitigate these pressures.
Other businesses: Other segment revenue increased 26% to $6.8 billion and profit increased 37% to $707 million, driven by at-Home Solutions, including ADS, OptiFreight and Nuclear and Precision Health Solutions.
Consolidated earnings: Total segment profit grew 29% to $3.7 billion, but corporate costs increased to $1.1 billion from $634 million, leaving consolidated operating income growth at 15%.

Cash and capital allocation

Cardinal generated substantially more operating cash in fiscal 2026 and used it across acquisitions, debt reduction, repurchases, dividends and infrastructure. Cash and equivalents ended the year at $4.9 billion, compared with $3.9 billion a year earlier.

Cash generation: Net cash provided by operating activities was $5.2 billion, up from $2.4 billion in fiscal 2025, reflecting working-capital timing and normal vendor-payment patterns.
Deployment: The company spent $1.9 billion on Solaris, $1.4 billion on share repurchases, $649 million on capital expenditures, $600 million on debt repayment and $491 million on dividends.
Leverage and authorization: Total long-term obligations and other short-term borrowings were $8.9 billion at June 30. Cardinal had $1.4 billion remaining under its existing repurchase authorization and approved a new $5.0 billion program on August 4, 2026.

Liabilities and uncertainties

The year ended with a stronger earnings profile but a larger set of acquired-business, financing, litigation, tax and regulatory exposures. Interest expense increased 62% to $348 million as debt financing supported acquisitions.

Opioid settlements: Cardinal had $4.3 billion accrued for opioid-related matters at June 30, made $417 million of related payments during fiscal 2026 and expects most remaining payments to occur through 2038.
Tax disputes: IRS proposals could create approximately $400 million of additional tax expense and $1.4 billion of additional tax liability in the self-insurance carryback matter, plus interest. A separate restructuring matter could create approximately $160 million of additional federal tax liability, also plus interest.
Investment impairment: Cardinal recorded a $122 million pre-tax impairment of its 16% equity interest in Outcomes, reflecting a reduction in the estimated fair value of that business.

Cardinal Health, Inc.

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