DUBLIN, Ohio (AP) — Cardinal Health Inc.'s fiscal second-quarter net income climbed 16 percent, as generic drugs helped improve profitability for the health care products distributor
The Dublin, Ohio, company, which distributes pharmaceuticals and medical products and makes products like gloves and gowns for surgery, also on Tuesday raised the low end of its fiscal 2013 earnings forecast.
Cardinal's profit rose to $303 million, or 88 cents per share, in the three months that ended Dec. 31, from $262 million, or 75 cents per share, in the prior year's quarter. Adjusted earnings totaled 93 cents per share, excluding one-time costs like acquisition expenses.
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Revenue fell 7 percent to $25.23 billion from $27.08 billion.
Analysts surveyed by FactSet expected, on average, earnings of 85 cents per share on $24.61 billion in revenue.
An influx of generic equivalents to popular brand-name drugs like the cholesterol fighter Lipitor has hurt revenue but helped profitability for drugstores and other drug distributors over the past year. Generics hurt revenue because they're cheaper than their brand-name counterparts. They boost profitability because they come with a wider margin between the cost for the distributor to purchase the drugs and the reimbursements it receives.
Cardinal Health said earnings from its largest segment, pharmaceutical, rose 12 percent to $441 million in the quarter, even though revenue fell 8 percent. Revenue fell in part because pharmacy benefits manager Express Scripts Holding Co. did not renew a contract.
Earnings from its medical segment rose 11 percent to $94 million, helped by acquisitions.
Cardinal also said Tuesday it now expects fiscal 2013 earnings of $3.42 to $3.50 per share, after forecasting $3.35 to $3.50 per share last fall.
Analysts expect, on average, earnings of $3.44 per share for the year ending in June.
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