Cardinal Health, Inc. CAH is scheduled to report third-quarter fiscal 2022 results on May 5, before the opening bell.

In the last reported quarter, the company delivered an earnings surprise of 3.3%. Its earnings beat the Zacks Consensus Estimate in one of the trailing four quarters and missed thrice, the average negative earnings surprise being 9.2%.

Q3 Estimates

For the fiscal third quarter, the Zacks Consensus Estimate for earnings is pegged at $1.54 per share, indicating an improvement of 0.7% from the prior-year quarter. The same for revenues stands at $43 billion, suggesting growth of 9.5% from the year-ago reported figure.

Factors to Note

Cardinal Health's Pharmaceutical segment is the second-largest pharmaceutical distributor in the United States. In the second quarter of fiscal 2022, pharmaceutical revenues amounted to $41.38 billion, up 11% on a year-over-year basis. The performance reflects branded pharmaceutical sales growth from Pharmaceutical Distribution and Specialty Solutions customers. This momentum is likely to have continued in the fiscal third quarter.

Per the fiscal second-quarter 2022 earnings call, management continues to anticipate a recovery in generic volumes to pre-COVID levels by the end of the calendar year. During the last reported quarter, the segment witnessed double-digit contributions from its growth businesses — Specialty, Nuclear and Outcomes. The company's to-be-reported quarter's results are likely to have gained from this trend.

Per the fiscal second-quarter 2022 earnings release, Cardinal Health collaborated with Ember Technologies to offer a cold chain solution that ensures product integrity and security across the supply chain while substantially lowering shipping waste in the transport of temperature-sensitive medicines.

Cardinal Health, Inc. Price and EPS Surprise

Cardinal Health, Inc. price-eps-surprise | Cardinal Health, Inc. Quote

In November 2021, the company partnered with Zipline to provide on-demand autonomous aircraft delivery to pharmacies. Through this collaboration, Cardinal Health will utilize Zipline's service for on-demand replenishment of pharmaceutical and medical products to retail pharmacy locations. The operation is likely to aid in mitigating the risk of inventory stock-outs for certain products and offer customers the right products at the right time for their patients.

During the fiscal first quarter of 2022, Cardinal Health collaborated with TerraPower to help develop and produce Actinium-225, which will be utilized in drug trials involving targeted alpha therapy for diseases such as breast, prostate, colon and neuroendocrine cancers, melanoma and lymphoma.

These developments are likely to have favored the company's fiscal third-quarter performance.

It is worth mentioning here that in the fiscal second quarter, Cardinal Health's Medical segment displayed considerable weakness. The company reported a profit of $50 million in the Medical segment, which plunged 79% from the year-ago quarter primarily due to inflationary impacts and global supply chain restrictions in products and distribution. The deterioration represented the timing of selling higher-cost personal protective equipment (PPE), including the net positive impact in the prior year, and to a smaller extent, the divestiture of the Cordis business. This weakness is likely to have persisted in the to-be-reported quarter.