Medical - Distribution

Average sentiment eased from 8 to 7.75 on a single score move, and pricing pressure spread from 2 companies to all 4. Cardinal Health (CAH) eased from 10 to 9, a step down that comes from the scoring base rather than the quarter. Its base score is 7 on reported EPS of -19.52% against revenue growth of 11.05%, with a guidance adjustment of 2 lifting it to 9. The quarter itself was the strongest in the group. Non-GAAP EPS of $3.17 represented 35% growth with operating earnings up 18%, and management raised the full-year non-GAAP EPS outlook $0.50 at the midpoint to $10.70 to $10.80, or 30% to 31% annual EPS growth. The gap between the two earnings measures is a $184 million pretax goodwill impairment on Navista, taken as Cardinal prioritizes the equity model over nonequity arrangements. Specialty revenue grew over 20% with oncology over 30%, total revenue increased 11% to $61 billion, and adjusted free cash flow guidance rose to $3.3 billion to $3.7 billion from $3 billion to $3.5 billion. The weak segment was GMPD, where profit fell to $25 million on the adverse net impact of tariffs; Cardinal has paid approximately $200 million in IEPA tariffs.