Pharmaceuticals and healthcare supplies distributor Cardinal Health reported its 2025 first quarter financial results on Nov. 1, showing a decrease in sales driven by the departure of a major customer earlier this year.

For the first quarter of 2025, Cardinal Health posted 1Q total sales of $52.3 billion, a 5% decrease from the same period a year prior, with the company noting that 1Q sales increased 15% excluding the impact of a “large customer contract expiration.” Optimum — a subsidiary of United Health Group — represented approximately 15% of Cardinal Health’s 2023 total revenue. The contract, first signed in 2015, with Cardinal Health expired at the end of June.

The company’s net profit of $416 million was down $12 million from the same period a year prior.

Operating profit of $568 million decreased $32 million year-over-year.

Cardinal Health was No. 3 on MDM’s Top Distributor List for Pharmaceuticals & Healthcare.

By Segment in 1Q

• The Pharmaceutical and Specialty Solutions segment 1Q revenue of $48 billion decreased 5%, driven by the impact of Optimum. Segment profit of $530 million increased 16% year-over-year, driven by a higher contribution from brand and specialty products, including the launch of COVID-19 vaccine distribution and positive generics program
• The Global Medical Products and Distribution (GMPD) segment 1Q revenue of $ 3.1 billion increased 4% year-over-year, driven by volume growth from existing customers. The segment’s 1Q profit decreased from $12 million to $8 million, driven by higher manufacturing, health and welfare costs.
• The 1Q revenue for ‘Other’ increased to $1.2 billion by %13 year-over-year, driven by growth across the three operating segments: at-Home Solutions, Nuclear and Precision Health Solutions and OptiFreight Logistics. The 1Q segment profit of $104 million increased by 8%, driven by the performance of OptiFreight Logistics.

“We began fiscal 2025 by delivering strong operational and financial performance, led by the Pharmaceutical and Specialty Solutions segment,” Cardinal Health CEO Jason Hollar said in the company’s financial release. “The strength and resiliency of our largest and most significant business continues to shine, giving us confidence to raise our fiscal 2025 enterprise guidance only a quarter into the year. Across the business, we remain focused on executing our plan to best serve our customers and create value for our shareholders.”

2025 Outlook

In releasing its 2025 outlook, Cardinal Health said it expects its Pharmaceutical and Specialty Solutions segment to grow between 4% to 6%, from its previous 1% to 3% growth.

The company lowered its outlook for the Global Medical Products and Distribution segment to between $140 million to $175 million, previously $175 million, due to the impact of higher health and welfare costs.

Extra Insights

Cardinal Health announced three distribution center expansions, including: a center in Boylston, MA, to support its U.S. Medical products and distribution business; a facility in Walston Hills, OH that is expected to be operating by the Spring of 2025; and a 350,000-square-foot facility in Greenville, SC dedicated to at-home healthcare medical supplies.

The company reported its full-year 2024 and fourth quarter fiscal results on Aug. 14. Cardinal Health posted total fiscal 2024 sales of $226.9 billion, an 11% increase from the $205 billion in the fiscal year 2023. The company’s net profit of $852 million was up by 61% year-over-year.