Cardinal Health, Inc. (Cardinal Health), a US-based medical devices company, has reported revenue of $24.9 billion for the third quarter fiscal of 2009, up 9%, compared with the revenue of $22.9 billion in the year-ago quarter. It reported net earnings of $312.9 million, or $0.87 per diluted share, for the third quarter fiscal of 2009, compared with the net earnings of $356 million, or $0.99 per diluted share, in the year-ago quarter.
Additional Third Quarter And Recent Highlights:
CareFusion Corporation filed a Form 10 registration statement with the Securities and Exchange Commission, marking a major milestone on the road to launch CareFusion as a standalone, public company.
Submitted a corrective action plan to the FDA outlining the company’s planned remediation for its infusion pumps as part of its obligations under the amended consent decree that was signed in February.
Selected by Novation, a leading health care contracting services company, to provide Cardinal Health’s Source generics program to hospitals within the Novation network.
Signed a large, sole-source contract for Pyxis(R) products at Community Health Systems (CHS), which has more than 120 facilities in 29 states and approximately 18,000 beds.
Launched nine products targeted to improve safety and efficiency within operating rooms, including high-performance surgical scrubs, a high-tech mobile fluid management system, advances in automated medical supply dispensing and new surgical instruments.
Expanded the nation’s largest radiopharmaceutical manufacturing network by opening a new facility in Omaha, Neb., giving local physicians advanced tools that aid in the early diagnosis and treatment of disease.
Clark said, Even with the additional impact from the infusion remediation reserve and the ship-hold, we are maintaining our full-year non-GAAP EPS outlook within, but at the low end of, our guidance range of $3.50 to $3.60 per share.
The company’s guidance does not reflect any incremental costs it will incur associated with the planned spinoff and separation of the two companies. The company expects a significant portion of these costs to be classified as special items in accordance with current company practices.
For the third quarter fiscal of 2009, non-GAAP earnings from continuing operations(1) declined 10% to $350 million, and non-GAAP diluted earnings per share from continuing operations(2) decreased 10% to $0.97 from the prior year period. Including the $36 million after tax or $0.10 per share impact of special items, impairments and other costs associated with the planned spinoff of CareFusion Corporation, GAAP earnings from continuing operations were $314 million or $0.87 per share.
The year-over-year earnings decline was primarily driven by a deferral in hospital capital spending affecting the company’s Clinical and Medical Products segment, an additional reserve associated with the costs to remediate certain models of the company’s Alaris(R) infusion pump products, the negative impact on sales from a hold on shipping certain Alaris products and the negative effect of foreign exchange rates. The earnings decline was partially offset by a lower tax rate, due to a tax refund claim filed during the quarter.
The revenue and profit growth from the Healthcare Supply Chain Services segment in this economic downturn is encouraging, said R. Kerry Clark, Cardinal Health chairman and chief executive officer. We knew we were going to have a difficult quarter in our Clinical and Medical Products segment, but we remain in a strong, long-term competitive position and made progress during the quarter against some of our short-term challenges, which gives us confidence as we move towards completing the planned spinoff.
For the third quarter fiscal of 2009, revenue for Healthcare Supply Chain Services rose by 9%, to $24 billion. Sales to bulk pharmaceutical customers(4) increased 19% to $10.8 billion and sales to non-bulk pharmaceutical customers(5) increased 3% to $11.1 billion. Segment profit increased 2% to $384 million due to the total segment sales growth, strong performance in nuclear pharmacy services and disciplined management of operating expenses. Segment profit growth was partially offset by the impact of customer mix and higher bad debt expense.
With solid revenue growth from our pharmaceutical distribution business and profit growth from nuclear pharmacy services and medical product distribution, the Healthcare Supply Chain Services segment held up well in the fiscal third quarter in the face of a very challenging environment, said George Barrett, Cardinal Health vice chairman and chief executive officer of Healthcare Supply Chain Services. The segment remains focused on revitalizing our core businesses and providing the tools that allow our customers to thrive in this dynamic health care environment.
Revenue for Clinical and Medical Products down 6% to $1.1 billion, driven by sales declines from the previously disclosed deferral in hospital capital spending, the ship-hold on certain Alaris products and the impact of foreign exchange rates. The decline in segment revenue was partially offset by revenue growth in the infection prevention businesses, primarily from the Enturia acquisition. Segment profit declined 22% to $148 million, driven by the revenue decline, a reserve associated with remediation efforts for IV pumps, the ship-hold on certain Alaris(R) products and the impact of foreign exchange rates.
The overall trends in our Clinical and Medical Products segment remain fundamentally the same, with our capital equipment businesses being affected by the deferral in capital spending and our businesses related to disposables continuing to perform well, said David Schlotterbeck, Cardinal Health vice chairman and chief executive officer of Clinical and Medical Products. The complicating factor in the quarter was our recall and ship-hold on some of our infusion products, but we are making progress against our obligations under the amended consent decree with the FDA. In addition, we had another strong quarter from the Enturia acquisition, which continues to perform very well.