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Earnings analysis · 10-Q

CAH earnings analysis

Filed November 5, 2026 · Our reading of the company's report

The latest report

Cardinal Health delivered strong first-quarter results, with revenue up 5% to $67.5 billion, GAAP diluted EPS up 27% to $2.38, and operating earnings up 13% to $753 million. Pharma drove the improvement, while GMPD…

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Cardinal Health delivered strong first-quarter results, with revenue up 5% to $67.5 billion, GAAP diluted EPS up 27% to $2.38, and operating earnings up 13% to $753 million. Pharma drove the improvement, while GMPD profit fell 28% to $33 million because of distribution, foreign exchange, and tariff pressures. Operating cash flow improved to $1.398 billion and liquidity remained solid, although opioid obligations and potential IRS assessments represent significant financial risks.

Read the original on SEC.gov

Gross and operating margin

How much of each revenue dollar the business keeps.

4% Gross margin Operating margin Aug 2021 Nov 2026

One point per quarterly or annual filing. Both margins are shares of that report's revenue.

From revenue to operating profit

Where each $100 of revenue went in this report.

Of every $100 of revenue Cost of sales $96 Operating expenses $3 Left as operating profit $1

Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.

Where revenue came from

The business segments reported by the company.

Pharmaceutical and Specialty Solutions 92.7% Global Medical Products and Distribution 4.7% Other 2.6%

Shares of the segments disclosed in this filing, largest first.

How we read each report

Our analysis across the last few reports.

Read as bullish Read as bearish Aug 2021 Nov 2026

Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.

Reported figures

Earnings per share
$2.38

What stood out

  • Revenue and EPS Grew Strongly

    Revenue increased 5% year over year to $67,513 million from $64,009 million. GAAP diluted EPS increased 27% to $2.38 from $1.88, while non-GAAP diluted EPS increased 28% to $3.26 from $2.55.

  • Margins and Operating Earnings Improved

    Gross margin increased 12% to $2,596 million from $2,319 million, and the gross margin rate rose 23 basis points year over year. GAAP operating earnings increased 13% to $753 million from $668 million.

  • Pharma Segment Led Growth

    Pharmaceutical and Specialty Solutions revenue rose 6% to $62,582 million and segment profit rose 17% to $783 million, driven by branded and specialty pharmaceutical products and the generics program.

  • Operating Cash Flow Strengthened

    Operating cash flow increased to $1,398 million from $973 million. After $157 million of capital expenditures, free cash flow was approximately $1,241 million.

  • Liquidity Supported Capital Returns

    Cash and equivalents increased to $5,264 million from $4,856 million at June 30, 2026. The company repurchased $500 million of common shares and paid $126 million in dividends during the quarter.

  • Lower Taxes Supported EPS

    The effective tax rate declined to 19.2% from 24.1%, contributing to the increase in GAAP diluted EPS. Interest expense also declined 9% to $73 million, primarily due to increased interest income.

What to watch

  • GMPD Profit and Tariff Pressure

    GMPD segment profit declined 28% year over year to $33 million, primarily due to unfavorable distribution and foreign exchange impacts. Management stated that tariff-related costs have not been fully offset and may continue to pressure results.

  • Material IRS Tax Exposure

    The IRS issued a Notice of Proposed Adjustment that could result in approximately $400 million of additional tax expense and approximately $1.4 billion of additional tax liability, both plus interest, related to net operating loss carrybacks.

  • Opioid Litigation and Cash Outflows

    Cardinal Health had $3.9 billion accrued for opioid-related matters at September 30, 2026 and made $385 million of related payments during the quarter. Approximately 56 private-plaintiff lawsuits remained pending, including approximately 9 purported class actions.

Management's outlook

The 10-Q does not provide quantitative full-year revenue or EPS guidance. Same-day earnings materials reported FY2027 non-GAAP EPS guidance of $12.80-$13.00, but that outlook is not presented as guidance in the extracted 10-Q.

Earlier filings 4

10-K · August 11, 2026

Cardinal Health delivered strong fiscal 2026 growth, with revenue up 14% to $254.248 billion, GAAP EPS up 12% to $7.23, and operating cash flow increasing to $5.174 billion. Pharma and the acquired MSO and at-Home…

10-Q · April 30, 2026

Cardinal Health reported Q3 FY26 revenues of $60.9 billion, an 11% increase year-over-year, driven by branded and specialty pharmaceutical sales growth. Despite a GAAP EPS decline of 20% to $1.69 due to goodwill…

10-Q · November 1, 2024

Cardinal Health reported revenue of $52,277 million, down 4% year-over-year, driven by the expiration of OptumRx contracts (which generated 17% of FY2024 revenue). Gross margin rose 9% to $1,902 million (3.64% of sales)…

10-K · August 14, 2024

Cardinal Health reported FY2024 revenue of $226,827 million and net earnings attributable to Cardinal Health of $852 million (diluted EPS $3.45), reflecting year-over-year improvement from $204,979 million revenue and…

This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.