Why This Matters to Distributors: Cardinal Health’s medical products business, which includes gloves, lab supplies, and clinical equipment, saw profits squeezed sharply in one quarter because of tariffs, even as sales remained steady. That suggests distributors that rely on imported products may face similar pressure as higher costs move through the supply chain.
Cardinal Health reported third-quarter revenue of $60.9 billion on Wednesday, up 11% from $54.9 billion a year earlier, as strong pharmaceutical sales helped offset a sharp drop in profits in its medical products business tied to tariffs.
For the first nine months of fiscal 2026, revenue rose 17% to $190.6 billion from $162.4 billion in the same period last year.
Quarterly profit fell 21% to $399 million from $506 million a year earlier, due to a $184 million write-down tied to the company’s Navista and ION oncology unit. Excluding that charge and other one-time items, profit rose 32% to $750 million.
Throughout the first nine months of the fiscal year, profit was flat at $1.32 billion. Without one-time items, profit increased 33% to $1.98 billion.
“An excellent third quarter extends our FY26 momentum, due to the durability and resilience of our business,” CEO Jason Hollar said in a statement. He pointed to strong results in the company’s pharmaceutical unit and said Cardinal Health raised its full-year outlook for a second straight quarter.
Cardinal Health’s pharmaceutical and specialty distribution business, its largest segment, generated $56.1 billion in third-quarter revenue, up 11% from $50.4 billion a year earlier, driven by demand for brand-name and specialty drugs. Profits in that unit rose 18% to $784 million. For the first nine months, revenue increased 18% to $176 billion and profit rose 24% to $2.14 billion.
The company’s medical products and distribution business showed a different trend. Third-quarter revenue was flat at $3.1 billion, while profit fell 36% to $25 million from $39 million a year earlier. Cardinal Health said tariffs were the main reason. Profits as a share of sales dropped to 0.79% from 1.23% a year earlier.
For the first nine months, the medical products business reported revenue of $9.59 billion, up 2%, and profits of $108 million, up 66% from a weak year-ago comparison. But the latest quarter points to growing pressure.
Cardinal Health raised its full-year forecast, now expecting earnings of $10.70 to $10.80 per share. It also increased its expected cash generation to between $3.3 billion and $3.7 billion.
The company said it has repurchased $1.0 billion of its shares so far, this fiscal year and paid down $100 million in debt ahead of schedule.
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