Cardinal Health, Inc. (CAH) delivered some good news to investors Tuesday, lifting its fiscal 2026 earnings outlook and highlighting progress across several strategic initiatives.
The healthcare distribution giant now expects non-GAAP diluted earnings per share of at least $10 for fiscal 2026. That's a meaningful bump from the previous guidance range of $9.65 to $9.85 per share, reflecting stronger operational performance than the company initially anticipated.
The real growth story here is in Specialty. Cardinal Health now projects that segment will generate more than $50 billion in revenue during fiscal 2026. Put another way, that's about a 16% compounded annual growth rate over three years, which is pretty impressive for a healthcare distributor.
Navigating Medicare Changes
One potential headache the company managed to sidestep: changes to the Medicare Drug Price Negotiation Program. Cardinal said it successfully renegotiated pharmaceutical distribution agreements affected by the new rules before they took effect. The key point for investors is that the company's distribution services remain appropriately compensated for delivering drugs safely and efficiently, so no margin squeeze there.
New Diabetes Program Gains Traction
The company also rolled out the ContinuCare Pathway program through its at-Home Solutions business. The idea is to make diabetes supply management and insurance navigation simpler for patients and partner pharmacies. It's already gaining traction: Publix Super Markets enrolled nearly all of its pharmacy network in the program, which suggests the value proposition is resonating.