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Cardinal Health Posts Fiscal 2014 Second-Quarter Results

February 4, 2014

Cardinal Health on January 30 reported fiscal year 2014 second- quarter revenue of $22.2 billion and non-GAAP diluted earnings per share from continuing operations (EPS) of $0.90 . In a release on January 30 , the Company noted that Non-GAAP operating earnings increased 10 percent to $579 million . The EPS figures included the unfavorable impact of a discrete $56 million tax charge, or $0.16 per share. "We had a very strong second quarter operating performance, closing out an excellent first half to our fiscal 2014," said George Barrett , chairman and chief executive officer of Cardinal Health . "Our businesses continue to adapt to a dynamic health care environment with a focus on creating value for our customers and patients at a time of great change. The signing of our generic sourcing joint venture with CVS Caremark reflects this focus and strengthens our long-term positioning in our Pharmaceutical segment. Our Medical segment continues to pursue new ways to serve the health care system, building out our preferred medical products portfolio and expanding our platform to serve patients in alternate sites of care, including the home." Both GAAP and non-GAAP EPS reflect a tax charge of $56 million , or $0.16 per share, based on proposed assessments of additional tax. SEGMENT RESULTS Pharmaceutical segment As expected, revenue for the Pharmaceutical segment declined 15 percent to $19.4 billion , due to the continuing impact of the expiration of the Walgreens contract. The decline was partially offset by sales growth from new and existing customers. Segment profit increased 9 percent to $482 million , primarily driven by strong performance from both generic programs and branded agreements, including the impact of price inflation. Segment profit growth was partially offset by the loss of the Walgreens contract. Medical segment Revenue for the Medical segment was up 13 percent to $2.8 billion , driven by the home health platform, reflecting the acquisition of AssuraMed , and growth from strategic hospital network accounts. Segment profit increased 40 percent to $131 million , primarily driven by home health. ADDITIONAL SECOND-QUARTER AND RECENT HIGHLIGHTS In December 2013 , Cardinal Health and CVS Caremark announced the signing of an agreement to form the largest generic sourcing entity in the U.S., which is the world's largest generic drug market. Both companies are contributing their sourcing and supply chain expertise to the 50/50 joint venture and are committing to source generic drugs through it. The U.S.-based joint venture is expected to be operational as soon as July 1 and will have an initial term of 10 years. Other highlights of the quarter include: -Secured three-year extension of pharmaceutical distribution service agreements with CVS Caremark through June 2019 -Introduced new central fill service to help hospitals and integrated delivery networks expand the reach of their outpatient pharmacies -Expanded home health capabilities via two tuck-in acquisitions in the urology, incontinence and ostomy areas -Finalized two additional tuck-in acquisitions in China which expand the company's geographic presence and capabilities Cardinal Health is a health care services company. More Information: ((Comments on this story may be sent to ))

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