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Cardinal Health Falls as Analysts Focus on Earnings Miss, Guidance

Cardinal Health reduces its full-year guidance after missing Wall Street's third-quarter estimates. The stock is lower.
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Analysts were reacting Thursday to Cardinal Health's  (CAH)  third-quarter results, where the drug distributor missed Wall Street's expectations and narrowed its full year guidance.

Shares of the Dublin, Ohio company were tumbling 10.1% to $54.66 at last check.

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Cardinal Health reported net income of $119 million, or 40 cents a share, a third of the $350 million, or $1.19 a share, in the year-earlier quarter.

Excluding special items, the latest adjusted earnings per share came to $1.53, missing FactSet's analyst consensus of $1.55 a share.

Revenue totaled $39.3 billion, up from $39.2 billion but short of FactSet's call for $40.1 billion.

The company said a decline in its pharmaceutical segment stemmed primarily from COVID-19-related volume declines in the company's generics program.

The company reduced its fiscal 2021 adjusted earnings guidance range to $5.90 to $6.05 a share, from earlier guidance of $5.85 to $6.10.

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"With our resilient business model and strong fundamentals, we are navigating the effects of the pandemic and finding opportunities to adapt, innovate and invest," Chief Executive Mike Kaufmann said in a statement.

Cowen analyst Charles Rhyee said in a research note that a higher-than-expected tax rate drove the earnings miss. He rates the stock market perform with a $59 price target.

Evercore ISI analyst Elizabeth Anderson, who has an in-line rating on the stock with a target of $62, cited lighter-than-expected revenue for its pharmaceuticals business paired with a miss for its medical arm, according to Bloomberg.

Baird analyst Eric Coldwell, who has an outperform rating and a $66 price target, said “results and outlook won’t suffice” with initial investor feedback on the earnings coming in negative.

In March, Cardinal Health said it would sell Cordis, its medical-device business, to private-equity firm Hellman & Friedman for about $1 billion.

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