By Kamal Choudhury
(Reuters) -Cardinal Health said on Thursday its diverse global footprint is not “bulletproof” to extreme tariff rates, as the drug distributor expects a hit of $200 million to $300 million in gross costs in fiscal 2026 despite mitigation efforts.
The company reduced its workforce in the third quarter and plans to work with customers on price hikes as well as alternative solutions to tariffs, CEO Jason Hollar said in a post-earnings call.
The earlier tariffs will not have a significant financial impact on the company’s fourth quarter as most of the effects will either be offset or recognized in future periods, CFO Aaron Alt said.
However, Cardinal expects double-digit growth in its adjusted earnings for the fiscal year 2026, despite the ongoing macroeconomic uncertainty.
Alt said the company is “confident” in its ability to navigate the changes to the U.S. healthcare ecosystem, “whether that is…review of the pharmaceutical industry or the recent drug pricing executive order.”
Cardinal raised its fiscal 2025 profit forecast for the fourth time earlier in the day, betting on strong demand for costly specialty medicines and branded drugs.
The company expects adjusted profit of $8.05 to $8.15 per share for the fiscal year ended June 30, compared with the prior view of $7.85 to $8.00 per share. Analysts were expecting annual profit of $7.96 per share, according to data compiled by LSEG.
Cardinal Health reported third-quarter profit of $2.35 per share on an adjusted basis, beating analysts’ average estimate of $2.17 per share.
The company’s share rose 3.5% in morning trading.
(Reporting by Kamal Choudhury in Bengaluru; Editing by Sahal Muhammed and Shreya Biswas)
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