Cardinal Health reported fiscal first-quarter results that surpassed Wall Street expectations, driven by a double-digit profit increase in pharmaceutical and specialty solutions. This strong performance has led the drug distributor to revise its full-year earnings outlook upward. Adjusted earnings for the quarter ending September 30 rose 9% year over year to $1.88 per share, despite revenue dropping 4% to $52.28 billion.
Analysts had anticipated earnings of $1.62 per share and revenue of $50.82 billion. Notably, revenue would have surged by 15% when excluding the effects of the previously announced OptumRx contract expiration. "We continue to operate in a stable industry environment with positive utilization trends underpinning our growth," stated Chief Executive Jason Hollar during an earnings conference call.
"We saw particularly strong and broad-based pharmaceutical demand this quarter across brand, specialty, consumer health, and our generics program." The company's stock surged 7.1% in trading on Friday, marking a 15% increase year to date. Profit from pharma and specialty solutions saw a remarkable 16% jump to $530 million, primarily attributed to increased contributions from brand and specialty products, including the early seasonal launch of COVID-19 vaccine distribution and strong performance in the generics program.
Although revenue for this segment decreased by 5%, it climbed by 16% when excluding the OptumRx contract expiration. Conversely, the global medical products and distribution segment reported a decline in profit compared to the previous year. For fiscal 2025, Cardinal Health now anticipates adjusted earnings per share (EPS) to be between $7.75 and $7.90, a revision from the previous range of $7.55 to $7.70.
The Street is projecting $7.64. In the pharma and specialty solutions segment, the company projects profit growth of 4% to 6%, an increase from the earlier forecast of 1% to 3%. Chief Financial Officer Aaron Alt mentioned, "While the demand for COVID-19 vaccines in the second quarter is difficult to predict, trends suggest that we should expect a modest headwind for the full year, with the benefits seen in the first quarter likely offset by reduced year-over-year COVID-19 vaccine sales in the second quarter." The company has also updated its full-year adjusted free cash flow expectations, projecting between $1 billion and $1.5 billion, compared to the prior outlook around $1 billion. In September, Cardinal Health announced plans to acquire Integrated Oncology Network for approximately $1.12 billion in cash.
The waiting period under the Hart-Scott-Rodino Act for this transaction has expired, with the deal expected to close by the end of the calendar year, Alt shared with analysts on Friday. "We are in an active M&A environment, and we will continue to pursue inorganic activities that align with our strategic priorities of investing primarily in specialty, along with other growth areas such as at-home services, nuclear medicine, and OptiFreight," Hollar concluded during the call..