Cardinal Health records $1 billion opioid-related charge, but stock surges as adjusted profit beats forecasts

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Shares of Cardinal Health Inc. rallied 5.0% in premarket trading Thursday, after the health care services company reported a fiscal first-quarter adjusted profit and revenue that rose above expectations, and raised its full-year earnings outlook. The company reported a net loss that narrowed to $253 million, or 86 cents a share, from a loss of $4.92 billion, or $16.65 a share, as the company recorded a $1.02 billion charge in connection with opioid lawsuits this year, after a $5.63 billion charge last year. Excluding non-recurring items, adjusted earnings per share rose to $1.51 from $1.27, well above the FactSet consensus of $1.13. Revenue rose 5% to $39.1 billion, beating the FactSet consensus of $38.2 billion, as pharmaceutical revenue grew 5% to $35.1 billion to beat expectations of $34.3 billion. For fiscal 2021, the company raised its adjusted EPS guidance range to $5.65 to $5.95 from $5.25 to $5.65, citing a lower than previously anticipated headwind related to the COVID-19 pandemic and improved cost savings. The stock has declined 2.3% year to date through Wednesday, while the SPDR Consumer Discretionary Select Sector ETF has edged up 7.7% and S&P 500 has gained 6.6%.
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