Cardinal Health Posts 40% EPS Growth in Q4, Guides for Double-Digit Expansion in Fiscal 2027
The healthcare services giant reported strong momentum across its pharmaceutical and specialty segments, while raising full-year earnings guidance above its long-term growth targets.
Strong Quarter Caps Record Year
Cardinal Health, Inc. (CAH) reported fourth quarter diluted earnings per share of $2.91, representing 40% growth year-over-year, as the healthcare services company concluded fiscal 2026 with broad-based strength across its portfolio (earnings call, 2026-08-11).
For the full fiscal year, the company generated enterprise operating earnings of $3.6 billion, up 30%, while adjusted free cash flow reached $5 billion. Total company revenue for the quarter was $63.7 billion, an increase of 6%, driven primarily by the Pharmaceutical and Specialty Solutions segment (earnings call, 2026-08-11).
CFO Aaron Alt noted that the quarter included a onetime benefit: "We recorded a onetime $100 million net operating earnings benefit from IEEPA tariff refunds in our GMPD segment," which contributed approximately $0.31 to EPS, or roughly 15 percentage points of the total growth (earnings call, 2026-08-11).
Pharmaceutical Segment Drives Performance
The Pharmaceutical and Specialty Solutions segment delivered fourth quarter revenue growth of 6% to $58.8 billion, with segment profit rising 21% to $645 million. The company observed "robust brand sales originating from our existing customer base" and roughly offsetting effects from GLP-1 growth tailwinds and IRA WAC change headwinds, each worth approximately 500 basis points (earnings call, 2026-08-11).
CEO Jason Hollar emphasized the segment's momentum: "Performance this quarter was once again led by Pharmaceutical and Specialty Solutions, where a resilient demand environment and continued strength across our specialty business, both upstream and downstream, drove strong results" (earnings call, 2026-08-11).
Medical Products Shows Improvement
The Global Medical Products and Distribution (GMPD) segment posted fourth quarter segment profit of $150 million, up $80 million year-over-year. Excluding the tariff refund impact, normalized segment profit was $50 million. Cardinal Health brand products saw their "sixth consecutive quarter of at least mid-single-digit Cardinal Health brand growth in the U.S." when adjusting for tariff impacts (earnings call, 2026-08-11).
Growth Businesses Deliver Double-Digit Gains
The company's other growth businesses—comprising at-Home Solutions, Nuclear and Precision Health Solutions, and OptiFreight Logistics—collectively delivered $183 million in segment profit, representing 14% growth. These businesses generated $1.7 billion in revenue, up 7% (earnings call, 2026-08-11).
Fiscal 2027 Outlook Above Long-Term Targets
Cardinal Health provided fiscal 2027 EPS guidance of $12.40 to $12.60, representing 13% to 15% growth against a normalized fiscal 2026 baseline of $10.95 (excluding the tariff refund benefit). This outlook exceeds the company's reconfirmed long-term EPS growth rate guidance of 12% to 14% annually (earnings call, 2026-08-11).
For the Pharmaceutical segment, the company expects 3% to 5% revenue growth, incorporating assumptions of strong demand but not the "outsized demand" experienced in fiscal 2026, along with IRA-related headwinds and double-digit specialty revenue growth (earnings call, 2026-08-11).
Capital Allocation and Liquidity
The company deployed $1.35 billion toward share repurchases during fiscal 2026 at an average price of $187 per share, $600 million above its baseline commitment. Cardinal Health ended the year with $4.9 billion in cash and confirmed a new $4 billion revolver program to replace three historic credit facilities (earnings call, 2026-08-11).
This article was generated by MarginX from the earnings call on 2026-08-11. It is not investment advice.