Cardinal Health (NYSE:CAH) reported fourth-quarter fiscal 2026 results marked by growth in revenue, operating earnings and adjusted earnings per share, supported by demand in its pharmaceutical and specialty businesses and a one-time tariff-related benefit in its medical products segment.
For the quarter, total company revenue rose 6% to $63.7 billion. Gross profit increased 16% to $2.6 billion, while operating income climbed 30% to $935 million. Diluted non-GAAP earnings per share were $2.91, up 40% from the prior-year period.
Fiscal 2026 Results and Capital Deployment
For the full fiscal year, Cardinal Health said revenue grew 14% to $254 billion, while gross margin increased 20% to $9.8 billion. Operating earnings rose 30% to $3.6 billion. The company reported full-year non-GAAP EPS of $11.26, which CEO Jason Hollar said was more than double the $5.07 reported in fiscal 2022.
Adjusted free cash flow totaled $5 billion for fiscal 2026, and the company ended the year with $4.9 billion of cash. Cardinal Health invested $649 million in capital expenditures during the year, including investments in automation, supply-chain technology, customer solutions and platform capabilities.
The company repurchased $1.35 billion of shares during fiscal 2026 at an average price of $187 per share. Hollar also said the board authorized a $5 billion increase in the company’s share repurchase authority, bringing total authorization to $6.4 billion.
- Fourth-quarter revenue: $63.7 billion, up 6% year over year.
- Fourth-quarter operating income: $935 million, up 30%.
- Fourth-quarter diluted EPS: $2.91, up 40%.
- Fiscal 2026 adjusted free cash flow: $5 billion.
- Fiscal 2026 share repurchases: $1.35 billion.
Pharmaceutical and Specialty Momentum
The Pharmaceutical and Specialty Solutions segment generated fourth-quarter revenue of $58.8 billion, up 6%, and segment profit of $645 million, up 21%. Alt attributed the profit increase to growth across the company’s brand and specialty portfolios, along with continued demand in its generic-drug program and benefits from brand-to-generic conversions.
The company said GLP-1 growth and changes tied to Inflation Reduction Act wholesale acquisition cost adjustments each affected segment revenue by roughly 500 basis points in opposite directions. Management said it expects the 2027 impact of IRA-related changes on revenue growth to be generally consistent with the second half of fiscal 2026, with no expected adverse effect on profit.
Hollar said specialty business growth exceeded 25% in fiscal 2026, aided by specialty distribution and acquisitions. For fiscal 2027, the company expects specialty revenue to remain in double-digit growth territory, though below the rate seen in the prior year.
Cardinal Health also highlighted expansion in its biopharma and cell-and-gene therapy operations. Its third-party logistics business secured two additional gene therapy commercialization agreements, Hollar said, bringing the company’s exclusive servicing relationships to nearly half of the cell-and-gene therapy market and about three-quarters of the total market.
Medical Products and Other Growth Businesses
Global Medical Products and Distribution, or GMPD, reported fourth-quarter revenue of $3.1 billion, down 2%. The decline reflected expected customer payables associated with the anticipated tariff refund and lower distribution volumes. Segment profit rose $80 million to $150 million, but would have been $50 million excluding the $100 million IEEPA tariff-refund benefit.
Management said Cardinal Health-brand product revenue in the U.S. declined 2% on a reported basis, but grew at least at a mid-single-digit rate for the sixth consecutive quarter when excluding the tariff impact.
For fiscal 2027, Cardinal Health expects GMPD revenue growth of 2% to 4% and segment profit of $200 million to $220 million, representing about $50 million of growth from the fiscal 2026 result excluding the IEEPA benefit. The company said a modest tariff tailwind is expected to offset higher fuel and commodity costs, though a prolonged conflict in Iran could push GMPD results toward the lower end of its profit range.
The company’s other growth businesses—at-Home Solutions, Nuclear & Precision Health Solutions, and OptiFreight Logistics—reported combined fourth-quarter revenue of $1.7 billion, up 7%, and segment profit of $183 million, up 14%.
Hollar said at-Home Solutions recorded nearly 99% fill rates and its best quarter for on-time departures. The company completed its acquisition of Strive Medical and expects the acquisition of AdaptHealth’s Diabetes Health business to add scale to its home-care operations. Management said integration of the Advanced Diabetes Supply acquisition is ahead of schedule on synergies.
Within Nuclear & Precision Health Solutions, Hollar said PET revenue grew more than 20% and theranostics revenue grew nearly 30% during the quarter. OptiFreight continued to see core volume growth and customer adoption of its Shipment Navigator and Tracking Beacon technology offerings, according to management.
Fiscal 2027 Outlook
Cardinal Health set fiscal 2027 adjusted EPS guidance of $12.40 to $12.60, representing growth of 13% to 15% from a $10.95 baseline that excludes the one-time tariff-refund impact. The company reaffirmed its long-term target of 12% to 14% annual EPS growth.
Management’s fiscal 2027 outlook includes:
- Pharmaceutical and Specialty Solutions revenue growth of 3% to 5% and profit growth of 8% to 11%.
- GMPD revenue growth of 2% to 4% and segment profit of $200 million to $220 million.
- Other growth businesses revenue growth of 11% to 13% and profit growth of 15% to 18%.
- Adjusted free cash flow of $3.5 billion to $4 billion.
- Capital expenditures of about $700 million.
- At least $1 billion in share repurchases.
Alt said the company is not assuming material acquisitions in its fiscal 2027 guidance, though it has retained flexibility for tuck-in deals and potentially larger strategic actions. Cardinal Health also expects interest and other expense of $240 million to $290 million and an effective tax rate of 19% to 20% for the year.
About Cardinal Health (NYSE:CAH)
Cardinal Health is a multinational healthcare services and products company headquartered in Dublin, Ohio. Tracing its roots to the early 1970s, the company has grown into a major provider of supply chain and distribution services for the healthcare sector. Cardinal Health operates across a range of service lines that support hospitals, health systems, pharmacies, physician offices and clinical laboratories.
The company’s core activities include the wholesale distribution of branded and generic pharmaceuticals, the supply and distribution of medical-surgical products, and the provision of logistics and inventory management solutions.
