Cardinal Health to Report Q2 Earnings: What's in Store for the Stock?

Cardinal Health, Inc. CAH is scheduled to report fiscal second-quarter 2025 results on Jan. 30, before the opening bell.In the last reported quarter, the company delivered an earnings surprise of 14.63%. CAH’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 11.24%.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Q2 Estimates for Cardinal HealthFor the fiscal second quarter, the Zacks Consensus Estimate for earnings is pegged at $1.74 per share, indicating a decline of 4.4% from the prior-year quarter’s reported figure. The same for revenues is pegged at $54.97 billion, implying a decline of 4.3% year over year.Factors to NoteFrom the fiscal third quarter of 2024, Cardinal Health started reporting its results under new operating segments — Pharmaceutical and Specialty solutions, Global Medical Products and Distribution (GMPD) segment, nuclear at-home and OptiFreight.During the first quarter of fiscal 2025, Pharmaceutical revenues decreased 5% year over year to $48 billion, primarily due to the contract expiration with OptumRx in June 2024. Excluding this impact, sales rose 16% year over year, driven by growth in branded and specialty pharmaceutical sales from existing customers. The segment’s profit grew 16% year over year to $530 million, fueled by higher contributions from brand and specialty products, the early seasonal launch of COVID-19 vaccine distribution, and strong generics program performance. This trend is likely to have continued in the to-be-reported quarter as well.Specialty Networks has been a significant driver of Cardinal Health’s success in the Pharma segment. These networks contributed strongly to the segment’s 16% profit growth during the fiscal first quarter. They enable efficient integration and provide community oncologists with enhanced clinical and economic tools, improving patient care and driving practice performance.In the first quarter of fiscal 2025, revenues in the GMPD segment totaled $3.1 billion, up 3% year over year. The uptick is driven by growth volume from existing customers. The segment reported a profit of $8 million compared with $12 million in the year-ago quarter, due to higher manufacturing and health and welfare costs.Per the fiscal first-quarter earnings call, the GMPD segment’s profit is expected to improve each quarter, with stronger results in the second half of the year due to ongoing business improvements and seasonality. However, the segment is likely to still face pressure from higher manufacturing costs and lingering health and welfare expenses in the fiscal second quarter compared to the fiscal first quarter.In November 2024, CAH announced two strategic acquisitions to enhance its specialty and at-home care services. The company will acquire a majority stake in GI Alliance for approximately $2.8 billion in cash. This move aims to accelerate Cardinal Health's multi-specialty growth strategy by expanding its presence in gastroenterology care. Additionally, Cardinal Health will acquire the Advanced Diabetes Supply Group (“ADSG”), a leading direct-to-patient provider of diabetes medical supplies, for about $1.1 billion in cash. ADSG will merge with Cardinal Health's at-Home Solutions business, bolstering its capacity to deliver medical supplies directly to patients' homes.Cardinal Health's recent opening of a 350,000-square-foot warehouse in South Carolina, equipped with the fastest order fulfillment system in the market, along with similar systems in Ohio and a planned Texas facility for 2025, is expected to drive growth and enhance operational efficiency. These new distribution centers are likely to aid the company’s supply chain, thus improving revenues. Cardinal Health is likely to provide further updates in this regard in the to-be-reported quarter.What the Zacks Model Unveils for Cardinal HealthOur proven model predicts an earnings beat for Cardinal Health this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is exactly the case here, as you will see below.Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +0.42%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.Zacks Rank: Cardinal Health currently carries a Zacks Rank #2.Cardinal Health, Inc. Price and EPS Surprise Cardinal Health, Inc. price-eps-surprise | Cardinal Health, Inc. QuoteOther Stocks to ConsiderHere are a few medical stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.Globus Medical GMED has an Earnings ESP of +7.37% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.The company expects to release its fourth-quarter and full year 2024 results on Feb. 20. Its earnings surpassed estimates in each of the trailing four quarters, the average surprise being 17.65%. The Zacks Consensus Estimate for earnings per share (EPS) indicates an improvement of 26.67% from the year-ago reported figure.Merit Medical Systems MMSI has an Earnings ESP of +3.03% and a Zacks Rank #2 at present. The company is slated to release its fourth-quarter and full year 2024 results on Feb. 25.MMSI’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6.42%. The Zacks Consensus Estimate for EPS indicates an improvement of 2.47% from the year-ago quarter’s figure.Masimo MASI has an Earnings ESP of +4.05% and a Zacks Rank of 2 at present.The company expects to release its fourth-quarter and full year 2024 results on Feb. 25. MASI’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 17.1%.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cardinal Health, Inc. (CAH): Free Stock Analysis Report Masimo Corporation (MASI): Free Stock Analysis Report Merit Medical Systems, Inc. (MMSI): Free Stock Analysis Report Globus Medical, Inc. 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