Cardinal Health (NYSE: CAH) continues to see strong business growth across its operating departments, led by its large pharmaceutical and specialty solutions segment.
The Dublin, Ohio-based company’s at-Home Solutions division likewise continues to see steady gains, propelled by home-based care tailwinds along with internal investments from Cardinal Health in the form of state-of-the-art distribution centers and new automation technologies. A novel reporting structure implemented at the start of last quarter has also positioned the at-Home Solutions division for success, according to Cardinal Health CEO Jason Hollar.
“Among our ‘Other’ operating businesses, our new reporting structure implemented at the start of Q3 is reinforcing our focus on performance and purposeful investment in growth,” Hollar said during Cardinal’s recent fiscal third quarter earnings call. “The strong demand we are seeing [across the segment], fueled by favorable industry trends, excites us about the long-term potential as these markets and businesses continue to develop.”
A distributor of pharmaceuticals, home medical equipment (HME), laboratory productions and more, Cardinal Health has operations in more than 30 countries, with roughly 48,000 employees globally. Its business offerings also include data solutions for health-care facility partners.
Overall, Cardinal’s fiscal third quarter revenues totaled $54.9 billion, a 9% increase from $50.5 billion during the same period the prior year. That majority of that – nearly $51 billion – came from the company’s pharmaceutical and specialty solutions segment.
Cardinal’s “Other” segment, which includes its at-Home Solutions and OptiFreight Logistics divisions, along with its nuclear and precision health solutions arm, brought in $1.2 billion in fiscal third quarter revenue. Year over year, that’s up 14% from just over $1 billion during the period.
Collectively, the various divisions within the Other segment helped grow segment profit by 5%, with OptiFreight Logistics leading the way.
“For the businesses included in Other, we expect the strong demand we’ve seen across these businesses to continue,” CFO Aaron Alt explained during the earnings call. “With positive industry trends and the strength of our competitive positioning, we expect collective segment profit growth in fiscal year ‘25 at the top end of our long-term target – approximately 10%.”
Key highlights for that at-Home Solutions business include Cardinal’s new facilities in Texas and South Carolina.
“Our business is positioned to accelerate in the coming years as we invest to expand the capacity of our network, the breadth of our offering and deploy new automation technology,” Hollar said. “We’re excited that our new distribution center being built in South Carolina, featuring the fastest order fulfillment system per square foot in the market, is scheduled to open by early next fiscal year.”
In terms of number of customers served, Cardinal has more than quintupled the size of its at-Home Solutions business.
A decade ago, the company delivered services to about 1 million customers annually. That number is closer to about 5 million today, according to the company.
“Our at-Home Solutions business plays an instrumental role in providing patients and caregivers the critical products and services they need for care in the home,” Hollar emphasized.
Moving forward, Cardinal’s strategic initiatives include building upon the growth and resiliency of the pharmaceutical and specialty solutions segment, while also accelerating growth in key areas, which will likely include its home-based care efforts.
Strategic M&A could also be on the table for Cardinal, which finished its fiscal third quarter with $3.7 billion of cash and equivalents on its balance sheet.
“As we look ahead, the current quarter’s results reinforce our confidence,” Hollar said. “We’re operating from a position of growing strength and resiliency, with industry trends that remain stable and in our favor.”
