(Reuters) – Drug distributor Cardinal Health on Thursday raised its fiscal 2025 adjusted profit forecast as strong demand for costly specialty medicines and branded drugs drove sales at its pharmaceuticals unit.
U.S. drug distributors are strengthening their position in the specialty medicine market, which focuses on treating complex diseases like rheumatoid arthritis and cancer, attracted by the lucrative profit potential of these products.
Earlier this month, Cardinal said it expects annual profit to be at the higher end of its previous forecast range.
The company now expects an adjusted profit of $7.85 to $8.00 per share, compared to its previous range of $7.75 to $7.90. The midpoint of which falls below analysts’ expectations of $7.86 per share, according to LSEG data.
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 company has been actively seeking to diversify beyond pharmaceutical distribution and, in 2024, made a series of strategic acquisitions to enter higher-growth healthcare sectors such as cancer care, gastroenterology, and at-home healthcare solutions.
This follows the loss of a major contract with UnitedHealth Group’s pharmacy benefit management unit OptumRX in 2024.
On an adjusted basis, Cardinal Health reported a profit of $1.93 per share for the quarter, beating analysts’ estimates of $1.76 per share, according to LSEG data.
The Ohio-based company’s second-quarter total sales came in at $55.26 billion compared to analysts’ estimates of $55.02 billion.
(Reporting by Kamal Choudhury and Christy Santhosh in Bengaluru; Editing by Tasim Zahid)
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