Cardinal Health

(CAH) - Get Report

said first-quarter earnings fell 60% from a year ago, as the company was forced to write down assets that it is negotiating to sell.

Cardinal earned $146.8 million, or 34 cents a share, in the quarter, compared with $365.7 million, or 84 cents a share, a year ago. Excluding discontinued operations, which include a $200 million writedown, the company earned 83 cents a share in the most recent quarter, including additional net charges of 4 cents a share.

Analysts were forecasting earnings of 86 cents a share in the most recent quarter.

Revenue rose 9% from a year ago to $20.64 billion, beating the Wall Street consensus by $100 million.

In Cardinal's main segment, pharmaceutical distribution and provider services, revenue rose 10% to $17.1 billion, including a 21% rise in bulk-sale revenue. But operating earnings fell 14% to $289 million due to "less earnings seasonality as the company now has 70% of its branded margin linked to nonseasonal distribution service fees. Distribution service agreements with branded manufacturers, many signed last year, have reduced a large portion of this earnings seasonality for fiscal 2006."

Cardinal reaffirmed that it expects to earn $3.30 to $3.55 a share excluding items in 2006, which ends in June. Analysts were forecasting $3.11 a share.

"Over the long-term, the company expects 12% to 15% annual growth in earnings per share, excluding special items and impairment, nonrecurring and other items," Cardinal said. "It also has an annual goal of returning up to 50% of operating cash flow to shareholders through share buybacks and dividends. Return on equity excluding special items and the impact of equity compensation expenses is expected to be in the range of 15% to 20%. It is also the company's goal to increase dividends to up to 20% of earnings per share during the next several years."