recorded sizable revenue declines in its fiscal fourth quarter and fiscal 2014, the drug and medical product supplier announced Monday. An expired contract with Walgreen Co.
continued to hamper results, but Cardinal Health still beat Wall Street's revenue expectations for the quarter and saw a sizable jump in net earnings as well.
“I am extremely proud of the progress we made in a year of transition for both Cardinal Health and the healthcare system,” Cardinal Health CEO George Barrett said in a release
. “The organization more than met the challenge.”
Last year, Walgreen announced it would ditch Dublin, Ohio-based Cardinal. Walgreen instead signed a long-term deal with drug wholesaler AmerisourceBergen Corp.
In fiscal 2013, Walgreen represented 20% of Cardinal Health's business. That lost contract was the primary driver behind Cardinal Health's 10% drop in revenue in its fiscal 2014 fourth quarter, when revenue stood at $22.9 billion. Revenue on the year also dropped 10%, from $101.1 billion to $91.1 billion.
Analysts had predicted Cardinal Health's fourth-quarter revenue would range between $20.4 billion and $22.4 billion.
Cardinal Health was able to offset some of the lost Walgreen business with revenue from its medical segment. Fourth-quarter revenue in that sector rose 4% to $2.8 billion, with “solid growth” in hospitals accounting for much of that increase, according to the company.
Cardinal posted a $234 million fourth-quarter profit in its fiscal 2014, compared with a $586 million net loss in same period a year ago. Last year's loss included a one-time impairment charge for its nuclear division, which includes diagnostics.
While it lost Walgreen, Cardinal Health has developed its business with CVS Caremark Corp.
, Walgreen's largest competitor. Last year, CVS and Cardinal Health extended their drug distribution deal through June 2019 and the two companies also agreed to create a joint venture for generic-drug purchasing. The 50-50 jointly owned company, Red Oak Sourcing, began operations July 1.
Cardinal Health, which supplies hospitals, ambulatory surgery centers, physician offices, medical suppliers, pharmacies and other segments of the healthcare system, said diluted earnings per share from continuing operations in fiscal 2015 would be between $4.10 and $4.30. Follow Bob Herman on Twitter: @MHbherman