Cardinal Health posts profit vs year-ago loss

By Debra Sherman

CHICAGO (Reuters) - Drug wholesaler Cardinal Health Inc (CAH.N) reported a quarterly profit on Thursday, reversing a year-earlier loss, and reaffirmed its fiscal 2008 outlook, but acknowledged that the slowdown in the pharmaceutical market weighed on its performance.

Net earnings were $366 million, or $1.02 per share, in its third quarter ended March 31, compared with a loss of $5 million, or 1 cent per share, a year earlier.

The average estimate on Wall Street was for net profit of $1.00 per share, according to Reuters Estimates.

The latest results included a charge of 6 cents per share related to an acquisition, litigation, restructuring and other items. The year-earlier loss included a big charge to resolve class-action securities litigation.

Revenue rose 5 percent to $22.9 billion.

"Total revenue growth has been negatively affected by several factors, some macro and some Cardinal specific," Chief Financial Officer Jeff Henderson told a conference call. "The overall pharma market slowdown affected us from a macro perspective."

He added that revenue growth was also hurt as contracts with its large customers were renegotiated at lower levels.

Expenses rose due to new systems at its distribution centers. The company was cited by the federal government last year for not having effective controls on drugs at some of its centers.