Cardinal Health on Thursday increased its annual adjusted profit forecast for fiscal 2026, citing robust demand for higher-priced specialty therapies and branded medicines within its pharmaceuticals and specialty solutions business.
The company now projects adjusted earnings of $10.70 to $10.80 per share for the year, up from its earlier projection of $10.15 to $10.35 per share. By comparison, analysts polled by LSEG had been expecting $10.31 per share.
For the third quarter ended March 31, Cardinal Health posted adjusted net income of $3.17 per share, topping consensus estimates of $2.79 per share. Total third-quarter sales were $60.9 billion, however, which fell short of the $61.7 billion figure analysts had anticipated.
The company derives a sizeable portion of its revenue from its pharmaceutical and specialty solutions unit, which supplies branded and generic drugs, specialty medicines and over-the-counter healthcare products. That unit recorded $56.1 billion in sales for the quarter, an 11% increase versus the year-ago period.
Cardinal is benefiting from structural demand for high-margin medicines used to treat complex conditions such as cancer and autoimmune diseases, the company said in explaining the improved outlook. The industrywide rollout of biosimilars for formerly patent-protected blockbuster drugs has also contributed to evolving revenue dynamics for distributors.
Industry peers including McKesson and Cencora are similarly positioned to gain from these trends, with distributors expanding beyond traditional wholesale into specialty medicine channels. Companies in the sector have been broadening their capabilities through acquisitions of physician practices and specialty care networks, a move that enables diversification of services and revenue streams beyond core drug distribution.
Contextual note: The stronger-than-expected adjusted quarterly profit and the raised annual guidance reflect Cardinal Health's exposure to higher-margin specialty therapies, even as total company sales for the quarter missed analyst estimates.
Data points:
- New fiscal 2026 adjusted EPS guidance: $10.70 - $10.80 per share (previous: $10.15 - $10.35)
- Analysts' expectation (LSEG): $10.31 per share
- Adjusted Q3 EPS: $3.17 per share (est. $2.79)
- Q3 total sales: $60.9 billion (est. $61.7 billion)
- Pharmaceutical and specialty solutions unit sales: $56.1 billion, up 11% year-over-year (quarter ended March 31)