11:57 AM EDT, 11/01/2024 (MT Newswires) -- Cardinal Health ( CAH ) reported fiscal first-quarter results that topped Wall Street expectations amid a double-digit profit increase in pharmaceutical and specialty solutions, prompting the drug distributor to lift its full-year earnings outlook.

Adjusted earnings increased 9% year over year to $1.88 a share for the quarter through Sept. 30, while revenue fell 4% to $52.28 billion. The Street was looking for $1.62 and $50.82 billion, respectively. Revenue jumped 15% when excluding the impact of the previously announced OptumRx contract expiration, Cardinal said.

"We continue to operate in a stable industry environment with positive utilization trends underpinning our growth," Chief Executive Jason Hollar said on an earnings conference call, according to a Capital IQ transcript. "We saw particularly strong and broad-based pharmaceutical demand this quarter across brand, specialty, consumer health and our generics program."

The company's shares were up 7.1% in Friday trade. Year to date, the stock has risen 15%.

Pharma and specialty solutions profit rose 16% to $530 million led by a higher contribution from brand and specialty products, including the earlier seasonal launch of COVID-19 vaccine distribution and positive generics program performance, according to a statement. The segment's revenue decreased 5%, but increased 16% excluding the impact of the OptumRx contract expiration.

Global medical products and distribution saw a profit decline year over year.

For its fiscal 2025, the company now expects adjusted EPS between $7.75 and $7.90, up from its previous outlook range of $7.55 to $7.70. The Street is projecting $7.64. For the pharma and specialty solutions segment, Cardinal now projects profit growth of 4% to 6%, up from its prior range of 1% to 3%.

"While the demand for COVID-19 vaccines in the second quarter is difficult to predict, trends tell us that we should continue to expect a modest headwind for the full year, with the tailwind we saw in (the first quarter) more than offset by lower year-over-year COVID-19 vaccine sales in (the second quarter)," Chief Financial Officer Aaron Alt said on the call.

The company now projects full-year adjusted free cash flow at $1 billion to $1.5 billion, compared with its previous outlook of about $1 billion.

In September, Cardinal agreed to acquire Integrated Oncology Network for about $1.12 billion in cash. The waiting period under the Hart-Scott-Rodino Act on the deal has expired, with closing expected by the end of the calendar year, Alt told analysts Friday.

"We are in an active M&A environment, and we'll continue to pursue inorganic activity to those areas that fit with our strategic priorities of investing primarily in specialty, as well as the other growth areas of at-home, nuclear and OptiFreight," Hollar said on the call.

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