Cardinal Health (CAH) Sees FY17 EPS at Bottom of Previous Guidance Range

Cardinal Health (NYSE: CAH) today is updating its Non-GAAP1 fiscal 2017 earnings per share (EPS) guidance and providing a preliminary view on fiscal 2018 and 2019. This is in conjunction with this morning's announcement of the planned acquisition of Medtronic's Patient Care, Deep Vein Thrombosis and Nutritional Insufficiency businesses.

Cardinal Health now believes that fiscal 2017 Non-GAAP EPS from continuing operations will be at the bottom of its previous guidance range of $5.35 to $5.50, with the EPS update attributable to expected fourth-quarter results. This takes into consideration generic deflation, which the company now expects to be in the low-double digits for the full fiscal year.

(Street sees FY17 EPS of $5.42)

Using the updated fiscal 2017 guidance as a base, Cardinal Health's preliminary fiscal 2018 view is for Non-GAAP EPS to be flat to down mid-single digits.

The company's early fiscal 2018 outlook reflects the following:

• A significant increase in the Medical segment's profit, including the contributions from the acquisition announced today. This acquisition is expected to contribute at least $0.21 Non-GAAP EPS accretion in fiscal 2018, assuming a first-quarter fiscal 2018 close,
• Several company-specific discrete items that, in the aggregate, will have a negative impact on EPS of at least $0.50, approximately half of which is reflected in the Pharmaceutical segment decline mentioned below, and
• While the company expects generic deflation to moderate to mid-single digits in fiscal 2018, this deflation is still a headwind for the Pharmaceutical segment for the year. This, combined with the discrete items mentioned above, could result in an estimated Pharmaceutical segment profit decline in the high-single digits versus fiscal 2017.

In addition, fiscal 2019 Non-GAAP EPS is expected to grow at least high-single digits versus fiscal 2018.

The company expects to provide an update to its fiscal 2018 preliminary outlook at its fourth-quarter earnings call later this year.

Conference Call

Please also reference today's release entitled "Cardinal Health to Acquire Leading Patient Product Portfolio from Medtronic for $6.1 Billion."

Cardinal Health will host a webcast and a conference call today at 8:30 a.m. Eastern to discuss both of today's announcements. To access the call and corresponding slide presentation, go to the Investor Relations page at ir.cardinalhealth.com. The call also can be accessed by dialing 913-312-1502, passcode #2495375. There is no pre-registration for the call; however, participants are advised to dial into the call at least 10 minutes prior to the start time.

Presentation slides and an audio replay will be archived on the website after the conclusion of the meeting. The audio replay will be available until Tuesday, April 25 at 12 p.m. Eastern at 719-457-0820, passcode #2495375.

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