By Connor Hart

Cardinal Health raised its outlook due in part to growth across its pharmaceutical and specialty unit, sending shares to a record-high on Thursday.

"For me personally, what's most exciting about this quarter is the breadth of the growth that we've seen," Chief Executive Jason Hollar said Thursday in an interview. "Yes, M&A was a part of it, but the core growth was clearly very strong."

Shares of Cardinal Health, which distributes pharmaceutical and medical supplies and provides healthcare services and solutions, hit an all-time high of $195.15 earlier in the day before paring some gains, recently up 12% at $184.48.

Its specialty business, part of its pharmaceutical and specialty-solutions segment, is the central pillar of the company's growth strategy. Beyond distribution, the unit generates higher-margin, service-based revenue that provides added value to customers, Hollar said.

Specialty growth has been running at a mid-teens pace organically for several years and came in slightly ahead of that in the latest quarter. Recent acquisitions such as GI Alliance and Solaris Health are complementing that momentum, Hollar said.

"The single greatest strategic priority for us, organically as well as inorganically, is our specialty business," he said.

GLP-1 medications, used in diabetes and weight-loss treatments, also contributed to growth in the pharmaceutical segment, accounting for roughly six percentage points of its 23% revenue increase. Hollar noted that while these drugs are a relevant component of revenue, they carry relatively thin margins and aren't a major earnings driver.

This year, Cardinal Health expects to add about $7 billion in new customer revenue, with most of that benefit concentrated in the first half. Much of that growth is expected to carry through to the bottom line, driving strong profit expansion.

The company has also lapped the loss of its contract with OptumRx, which had weighed on results in prior quarters. "What you see this year is the absence of that headwind," Hollar said.

Cardinal Health raised its adjusted earnings outlook to between $9.65 and $9.85 a share for fiscal 2026, up from a prior range of $9.30 to $9.50. Analysts polled by FactSet were looking for adjusted earnings of $9.44 a share.

For the three months ended Sept. 30, the Dublin, Ohio-based company posted a profit of $450 million, or $1.88 a share, compared with $416 million, or $1.70 a share, a year earlier. Adjusted earnings were $2.55 a share, topping the $2.18 a share Wall Street projected.

Quarterly revenue jumped 22% to $64 billion, above the $59.24 billion analysts had forecast.

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

October 30, 2025 13:13 ET (17:13 GMT)

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