Cardinal books earning drop, despite uptick in revenue for Q4, FY09

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Cardinal Health has reported a 15 percent drop in earnings from continuing operations, even though it experienced a 10 percent increase in revenue for the 2009 fourth fiscal quarter. These results also were reflective of the company’s year-end results.

The Dublin, Ohio-based company reported fourth quarter consolidated revenue growth to $25.2 billion, compared to 22.9 billion in the previous-year quarter, despite a decline in earnings from continuing operations to $268 million, compared to $316 million in the 2008 fourth quarter. The decline was driven by factors impacting the clinical and medical products business with a partial offset from solid profit growth from the healthcare supply chain services segment, according to Cardinal. Also, special items and impairments and other costs associated with the spinoff of CareFusion decreased after-tax earnings by $44 million.

For full fiscal 2009, consolidated revenue grew 9 percent to $99.5 billion and earnings from continuing operations declined 12 percent to $1.1 billion. Cardinal reported that net after-tax dilutive impact from special items and impairments and the impact of other costs associated with the CareFusion spinoff totaled $114 million.

The company said its fourth quarter was highlighted by the healthcare supply chain services segment, which reported an 8 percent increase in segment profit, driven by strong growth in the pharmaceutical supply chain and nuclear pharmacy services businesses, and a return to growth in its surgical and procedural kitting operations. Also, the growth in the final quarter contributed to a slight increase of 0.4 percent in the healthcare supply chain services segment profit for the full fiscal year.

The healthcare supply chain services segment increased fourth quarter revenue by 11 percent to $24.3 billion, driven by strong growth in the pharmaceutical supply chain business and nuclear pharmacy services businesses, the company said. For the full year, segment revenue increased 10 percent to $95.7 billion. However, fourth quarter revenue for the clinical and medical products segment declined 12 percent to $1.1 billion, due to the continued deferral in hospital capital spending, the Alaris system shipping hold and the negative impact of foreign exchange rates. Likewise, the clinical and medical products segment revenue saw a slight decrease of 0.4 percent for the full year to $4.6 billion, with increases in the first half of the year being offset by the revenue decline in the second half.

“While we are pleased with the improvement in the supply chain segment, our work continues as we take the necessary strategic actions to drive long-term growth,” said George Barrett, incoming chairman and CEO of Cardinal.