Cardinal Health Drops 9% After Q4 Results and $1.9B Solaris Health Acquisition

Cardinal Health's Q4 results were disappointing, leading to a 9% drop in shares. The company plans to allocate $1.9B for the acquisition of Solaris Health, a urology-focused healthcare management services organization. Despite the acquisition, Cardinal Health's shares declined significantly, indicating investor concerns over the company's financial performance.

Cardinal Health Inc. (NYSE: CAH) reported its fourth-quarter (Q4) results on Tuesday, with shares plummeting nearly 9% in pre-market trading. The company's top-line revenue missed market expectations, while adjusted earnings per share (EPS) beat forecasts. Additionally, Cardinal Health announced its intention to acquire Solaris Health, a urology-focused healthcare management services organization (MSO), for approximately $1.9 billion in cash.

The company's Q4 revenue totaled $60.159 billion, down 0.5% year-over-year (YoY), missing the Street's consensus of $60.92 billion [1]. Despite this, adjusted EPS came in at $2.08 per share, surpassing the expected $2.03 per share [1]. The pharmaceutical and specialty solutions segment revenue remained nearly flat at $55.4 billion, while the global medical products and distribution segment revenue increased by 3% to $3.2 billion [1].

Cardinal Health's CEO, Jason Hollar, stated, "Fiscal 2025 was a transformative year for Cardinal Health, and we closed the year with momentum, delivering strong fourth quarter results. The broad-based operational strength, with all five of our operating segments growing profit double-digits, reflects the disciplined execution of our strategy and our investments for growth" [1].

The company also raised its fiscal 2026 outlook, projecting adjusted EPS of $9.30 to $9.50 per share, up from the previously expected $9.10 to $9.30 per share [1]. This represents a 13% to 15% growth from last year's adjusted EPS of $8.24 per share [1].

Cardinal Health's stock price, which closed at $157.66 on Monday, dropped to $139.40 in pre-market trading, reflecting investor concerns over the revenue shortfall [3]. The company's stock has delivered an impressive 59% return over the past year, trading near its 52-week high of $168.44 [3].

Regarding the Solaris Health acquisition, Cardinal Health expects the deal to be slightly accretive to its adjusted EPS in the first 12 months post-close. The transaction is expected to close by the end of 2025 and will accelerate the company's multi-specialty growth by extending the reach of The Specialty Alliance [1]. Solaris Health supports over 750 providers across more than 250 practice locations in 14 states, and post-transaction, Cardinal Health's MSO platforms will reach around 3,000 providers in 32 states [1].

References:
[1] https://www.rttnews.com/3565045/cardinal-health-lifts-fy26-outlook-but-stock-down-as-q4-revenues-miss-street-to-buy-solaris-health.aspx
[2] https://seekingalpha.com/news/4483792-cardinal-health-stock-drops-q4-results
[3] https://www.investing.com/news/transcripts/earnings-call-transcript-cardinal-health-q4-2025-misses-revenue-forecast-93CH-4185318