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Cardinal Health Continues Skid After Outlook

The Associated Press

NEW YORK (AP) — Cardinal Health Inc. shares fell for a second day Wednesday after the company offered a disappointing outlook for the fiscal year ahead of its spinoff of its clinical and medical products business.

Shares of the Dublin, Ohio company slid 10.8 percent Tuesday, and in Wednesday afternoon trading, they lost another $2.57, or 7.9 percent, to $30.03.

On Tuesday, Cardinal forecast a fiscal 2009 profit of $2.20 to $2.25 per share excluding its clinical and medical products business, which will be spun off in the next few months under the name CareFusion Corp. Without CareFusion, Cardinal estimated its profit will be as much as 15 percent lower in fiscal 2010 compared with fiscal 2009.

In April, Cardinal said third-quarter results at CareFusion were hurt by delays in hospital spending. The unit's profit fell 22 percent for that quarter.

Eric Coldwell, an analyst for Robert W. Baird and Co., said those issues and greater internal investment dampen his outlook for CareFusion, which will become a separate publicly traded company.

Coldwell downgraded Cardinal shares to "Neutral" from "Outperform," and lowered his price target to $33 per share from $43. He estimated that CareFusion shares are worth $11 of that total.

Coldwell added that the spinoff costs were more than he expected.

Cardinal Health shares have traded in a 52-week range of $27.75 to $57.35.