Cardinal Health Stock Loses 14% As Q4 Earnings Disappoint; Expects COVID-19 Tailwinds To Impact FY22

Cardinal Health CAH reported fourth-quarter adjusted earnings today that were only two-thirds of what The Street expected.
The Company posted an adjusted EPS of $0.77, behind analysts' estimate of $1.20.
The health care services company's stock was down 13% in morning trading.
Q4 sales increased 16% Y/Y to $42.6 billion, beating the consensus of $40.43 billion.
A $197 million COVID-19-related inventory reserve adversely affected the operating earnings by around $300 million, helping to swing the Company's Medical segment to a $63 million Q4 loss compared with profits of $120 million a year ago.
Medical segment revenue increased 23% to $4.2 billion.
State and local opioid lawsuits resulted in $149 million in pre-tax charges in Q4.
The Pharmaceutical segment's profit was about the same year-over-year, at $358 million. Sales grew 15% to $38.3 billion.
"We're disappointed with our fourth-quarter results. Throughout the past year, we have been taking action to drive performance, and we will continue to move forward with urgency," Cardinal Health CEO Mike Kaufmann said in a news release.
Outlook: For FY222, the Company predicts the pandemic will create a $200 million tailwind for adjusted EPS, indicated at $5.60–5.90.
B of A Securities has downgraded Cardinal Health from Buy to Underperform and lowered the price target from $69 to $56.
Price Action: CAH shares closed down 14.20% at $50.57 on Thursday.