Cardinal Health Inc.'s (CAH) reported Thursday that its fiscal
third-quarter net income fell 12% on costs related to the planned
spinoff of its clinical and medical products businesses.
Chairman and Chief Executive R. Kerry Clark, which said the
company now sees fiscal-year earnings at the low end of its prior
forecast, noted the company remains "in a strong, long-term
competitive position and made progress during the quarter against
some of our short-term challenges."
Hospital-spending delays prompted the medical-goods supplier
last month to announce another round of job cuts and cost-control
measures. CareFusion, which is planned to be spun off later this
year, is eliminating 1,300 jobs or 7.8% of the unit's work
force.
The spinoff of the faster-growing unit and a generator of higher
margins than Cardinal's much larger, core drug-distribution
business is expected to produce savings of up to $130 million in
two years.
For the quarter ended March 31, Cardinal Health reported net
income of $312.9 million, or 87 cents a share, down from $356
million, or 99 cents a share, a year earlier. The latest quarter
included 10 cents in costs related to the planned spinoff.
Revenue rose 8.9% to $24.94 billion.
Analysts polled by Thomson Reuters were expecting earnings,
excluding items, of 95 cents a share on revenue of $24.01
billion.
Gross margin fell to 5.6% from 6.4%.
Pharmaceuticals-supply earnings rose 2%, helped by higher sales
to existing customers. Medical-segment profit fell 22% on a reserve
for problems with some infusion pumps the as revenue dropped 6% on
the stronger dollar.
Shares closed Wednesday at $11.80 and were inactive
premarket.
-By Mike Barris, Dow Jones Newswires; 201-938-5658;
mike.barris@dowjones.com