Cardinal Health ups guidance for the year on account of five key tailwinds
DUBLIN, Ohio — Cardinal Health is significantly bullish heading into fiscal 2014. And for good reason. Not only does the graying of the baby boomers continue to represent a strong tailwind, but there are five other factors that will help fill those sails as well, George Barrett, Cardinal chairman and CEO, told investors Thursday morning.
"We are in the early stages of an unprecedented demographic wave, bringing nearly 10,000 people per day to eligibility age for Medicare," Barrett said. And it's in part because of that burgeoning market demand that the healthcare industry dynamics are so promising. According to Barrett, the five key principles include:
- The demographics, economic and industry forces will require a healthcare system which places a high priority on efficiency and cost-effectiveness;
- Care will need to be more coordinated and delivered in multiple settings, leaning toward those healthcare providers who deliver on a promise of lower costs;
- Patients want and need care in the home. This will drive greater awareness of their conditions;
- The healthcare system will require continued innovation in both products and services; and
- As part of the system shift from fee-for-service to payment-for-outcomes, hospitals and other providers will increasingly look to partner with specialized companies to help drive those outcomes.
All of this bodes very well for the independents and other partners supported by Cardinal Health. "We will continue to strengthen our offerings to our independent pharmacy customers in fiscal 2014," Barrett said. "We're starting the year out with a gathering of thousands of owners and pharmacists at [Cardinal's] Retail Business Conference next week," he noted. "The focus is on sharing best practices, networking, continuing education and providing the latest tools and technologies available to help these critical members of the healthcare system improve their patient care, efficiency and profitability of their business."
Cardinal Health has spent the last few years strengthening its position in the independent market, Barrett said. "That continues to be an area of focus for us," he said. "We devote most of our energy to what we can do to make them more competitive and thrive in their marketplace."
Cardinal Health reported fourth-quarter fiscal year 2013 revenues of $25.4 billion and non-GAAP diluted earnings per share from continuing operations of $0.79, up 8%. Full fiscal year 2013 revenues decreased 6% to $101.1 billion, and non-GAAP diluted EPS from continuing operations increased 16% to $3.73.
"We exceeded our key financial goals for the year and accelerated the strategic repositioning we began several years ago. We enter fiscal 2014 with the financial strength, scale, customer and product portfolio, and organizational talent to lead in the rapidly evolving healthcare marketplace," Barrett stated. "Given our ongoing momentum and reflecting the expiration of the Walgreens contract, we are projecting fiscal 2014 non-GAAP diluted EPS from continuing operations in the range of $3.45 to $3.60, an increase from our initial expectations."
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