Shares of Cardinal Health Inc. (CAH) tumbled 13.7% toward a nine-month low in afternoon trading Thursday, after the distributor of drugs and laboratory products reported a big fiscal fourth-quarter earnings miss, and provided a downbeat outlook, as results were hurt by a $197 million COVID-related inventory reserve, related to personal protective equipment. The stock, which paced the S&P 500's decliners, was also on track to suffer the biggest one-day selloff since May 2018. Net income for the quarter to June 30 fell to $116 million, or 40 cents a share, from $656 million, or $2.23 a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share came to 77 cents, missing the FactSet consensus of $1.20. Revenue grew 16% to $42.59 billion, topping the FactSet consensus of $40.39 billion. Pharmaceutical revenue increased 15% to $38.3 billion, topping expectations of $36.7 billion, while medical revenue grew 23% to $4.2 billion but came up short of expectations of $4.28 billion. For fiscal 2022, the company expects adjusted EPS of $5.60 to $5.90, while the current FactSet EPS consensus $6.13. The stock has shed 4.9% year to date, while the SPDR Health Care Select Sector ETF (XLV) has rallied 17.0% and the S&P 500 has advanced 17.7%.
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