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Cardinal Health's Revenue Edges Down 2%
DOW JONES & COMPANY, INC. 8:27 AM ET 10/30/14
Symbol Last Price Change
CAH 78.08down 0 (0%)
WAG 62.83down 0 (0%)
ABC 79.74up 0 (0%)
KKR 22.25down +0 (+0%)
QUOTES AS OF 04:01:42 PM ET 10/29/2014
Cardinal Health Inc. (CAH) said its revenue edged down 2% in the September quarter, hurt by the expiration of its contract with Walgreen Co.(WAG)

The company was dealt a blow last year when Walgreen(WAG) and European drug giant Alliance Boots GmbH agreed to get their branded and generic pharmaceutical products from rival AmerisourceBergen Corp.(ABC)

Drug wholesalers have been forming ventures and collaborations with other health-care related companies, in an effort to increase their bargaining power with pharmaceutical companies and expand internationally.

Late last year, Cardinal Health(CAH) agreed to form a joint venture with CVS Caremark Corp., in which the drugstore- operator and pharmacy-benefits manager source generic drugs as consumers increasingly are using the less-expensive medicines.

The Dublin, Ohio-based company provides pharmaceuticals and medical products to more than 100,000 locations, while also offering direct-to-home distribution of medical supplies.

For its first quarter ended Sept. 30, the company posted a profit of $266 million, or 78 cents a share, compared with $339 million, or 99 cents a share, a year earlier. Excluding special items, earnings fell to $1 a share from $1.10.

Revenue fell to $24.07 billion from $24.52 billion. Excluding the impact of the Walgreen(WAG) contract expiration, revenue would have grown 13%, the company said. Analysts polled by Thomson Reuters recently projected earnings of 96 cents a share on revenue of $22.43 billion.

Revenue in the company's pharmaceutical segment fell about 3% to $21.21 billion because of the expiration of the Walgreens(WAG) contract in the prior-year quarter. Excluding the impact of the Walgreens(WAG) contract expiration, the segment's revenue would have grown 15%, the company said.

Segment profit rose 4% to $451 million, driven by growth from new and existing customers.

The medical segment's revenue increased 5% to $2.85 billion, driven by acquisitions, while profit climbed about 6% to $113 million.

The company backed its outlook for full-year earnings.

Write to Erin McCarthy at [e-mail]

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10-30-140827ET
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