Cardinal Health (NYSE: CAH) shares plummeted 11.97% in pre-market trading on Tuesday following the release of mixed fourth-quarter results and the announcement of a significant acquisition. The healthcare services company reported better-than-expected earnings per share but fell short on revenue expectations, while also revealing plans to acquire Solaris Health for $1.9 billion in cash.

For the fourth quarter of fiscal year 2025, Cardinal Health reported adjusted earnings per share of $2.08, surpassing the analyst estimate of $2.04. However, the company's revenue of $60.2 billion missed the expected $60.87 billion. The revenue miss appears to be weighing heavily on investor sentiment, despite the earnings beat.

Adding to the market's concerns, Cardinal Health announced the acquisition of Solaris Health for $1.9 billion in cash. While the company stated that this deal is expected to be accretive to earnings per share in the first year and will enhance its position in the urology management services organization sector, investors seem to be reacting negatively to the short-term financial impact of the acquisition. The substantial cash outlay for the purchase may be contributing to the stock's sharp decline.

Despite the negative market reaction, Cardinal Health raised its fiscal year 2026 non-GAAP EPS guidance to a range of $9.30 to $9.50, up from the previous range of $9.10 to $9.30. The company also projected revenue growth of 11% to 13% for FY 2026. However, these positive forward-looking statements appear insufficient to offset the market's immediate concerns about the current quarter's performance and the acquisition costs.

As investors digest the mixed results and weigh the long-term potential of the Solaris Health acquisition against its short-term costs, Cardinal Health's stock faces significant pressure in early trading. The market's reaction highlights the challenges companies face when balancing current performance with strategic long-term investments.