Drug distributor Cardinal Health, Dublin, Ohio, disclosed a new subpoena from the Securities and Exchange Commission and released long-delayed financials for its fourth quarter and fiscal year ended June 30, reflecting a restatement of results for fiscal 2002 through the first nine months of fiscal 2004. The subpoena, received Oct. 12, requests documents regarding compensation for certain current and former Cardinal employees and officers and apparently marks an expansion of a previously announced SEC probe. Cardinal also said it expects earnings per share to decline by as much as 15% in the first half of fiscal 2005, in large part because of its transition to a fee-for-service revenue model in its pharmaceutical distribution business.
For the fourth quarter, Cardinal earned $393.5 million, or 91 cents per share, compared with restated earnings of $354.9 million, or 79 cents per share, in the 2003 quarter. Revenue rose 11% to $17 billion. For fiscal 2004, Cardinal reported earnings of $1.5 billion, or $3.51 per share, compared with earnings of $1.4 billion, or $3.10 per share, in the previous year. Revenue rose 15% increase to $65 billion. Cardinal disclosed in May that the SEC had launched a formal probe related to Cardinal's accounting of litigation recovery from vitamin manufacturers and in June said the SEC and the U.S. attorney's office in New York were separately investigating revenue classification in its drug distribution business. -- by Cinda Becker