Cardinal Health easily topped Wall Street's September-quarter expectations Friday, leading CAH stock to extend its breakout well beyond the buy zone.
The massive drug and medical products distributor earned $1.20 per share, minus some items, on $49.6 billion in sales for its fiscal first quarter. Both measures handily beat expectations for profit of 94 cents per share and $48.19 billion in sales, according to FactSet.
Strength came from the pharmaceuticals division, while Cardinal Health aims to improve its much smaller medical products business. The latter delivers medical products and laboratory supplies like personal protective equipment. Medical segment profits took a hit due to inflation challenges, Cardinal Health said in a news release.
But on today's stock market, CAH stock added 5.1%, ending the regular session at 79.52. Shares are now trading above a buy zone after breaking out of a cup base with an entry at 71.22, according to MarketSmith.com.
CAH Stock: Pharma Sales Outperform
The company's biggest segment, pharmaceutical distribution, saw sales jump 15% to $45.8 billion. Profits from that division also grew 6%.
Meanwhile, revenue from the medical business declined 9% to $3.8 billion. The business also lost $8 million vs. a year-earlier profit of $123 million. Cardinal Health noted a lower contribution from personal protective equipment and inventory charges led to the first-quarter loss.
Still, Cardinal Health maintained its outlook for adjusted earnings of $5.05 to $5.40 per share. That falls in line with CAH stock analysts' call for $5.22.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
