May 2 (Reuters) - Cardinal Health ( CAH ) raised its

annual profit forecast on Thursday, betting on strength in its

pharmaceutical unit selling costly specialty drugs used to treat

complex conditions such as cancer.

Drug distributors, including rival Cencora ( COR ), have

been benefiting from growing sales of specialty medicines at a

time when prices of generic, or copycat, versions have been

falling due to intense competition.

Cardinal now expects 2024 adjusted earnings in the range of

$7.30 to $7.40 per share, compared with $7.20 to $7.35 per share

forecast previously. According to LSEG data, analysts were

expecting an annual profit of $7.28 per share.

The company also announced its preliminary outlook for 2025

adjusted profit, expecting at least $7.50 per share, compared

with estimates of $7.87.

Cardinal sources a substantial amount of its revenue from

the pharmaceutical and specialty solutions unit through which it

distributes branded and generic drugs, specialty medicines and

over-the-counter healthcare and consumer products. The unit

generated revenues of $50.7 billion, up 9% year-over-year, in

the third quarter ended March 31.

Total sales came in at $54.91 billion, missing analysts'

estimates of $56.06 billion.

Cardinal Health ( CAH ) said last month its contracts with

UnitedHealth Group's ( UNH ) OptumRx, one of its largest

customers, will not be renewed after they expire at the end of

June.

The Optum contracts, signed in 2015, contributed 16% of

Cardinal's total revenue in fiscal year 2023, but the bulk of

the shipments mainly comprised non-specialty medicines,

according to the company.

On an adjusted basis, Cardinal Health ( CAH ) reported a profit of

$2.08 per share, beating expectations of $1.95 per share.