Cardinal Health is acquiring the Patient Care, Deep Vein Thrombosis, and Nutritional Insufficiency divisions from Medtronic for $6.1b. In addition to that news, the company warned, ever so slightly, but a warning nonetheless.
Cardinal Health sees FY17 EPS guidance at lower end of prior range; provides updates on FY18/19 outlook
Co issues guidance for FY17 (Jun), sees EPS at the lower end of its guidance range of $5.35-5.50 vs. $5.42 Capital IQ Consensus Estimate.
Cardinal Health’s preliminary fiscal 2018 view is for Non-GAAP EPS to be flat to down mid-single digits. The company’s early fiscal 2018 outlook reflects the following: A significant increase in the Medical segment’s profit, including the contributions from the acquisition announced today. This acquisition is expected to contribute at least $0.21 Non-GAAP EPS accretion in fiscal 2018, assuming a first-quarter fiscal 2018 close.
In addition, fiscal 2019 Non-GAAP EPS is expected to grow at least high-single digits versus fiscal 2018.
The businesses should generate $2.4b in revenues over the next 4 quarters.
The transaction is expected to result in modest dilution on a net basis to the company’s fiscal year 2018 non-GAAP EPS in the range of ~$0.12-0.18, with the exact amount primarily dependent on the closing date of the transaction.
Combined, the businesses expected to be divested in the transaction generated ~$2.4 bln in revenue over the last four reported quarters.
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No mention of contingency for 0bamacare blowing up.
I wonder if Medtronic is getting rid of them to focus on robotics? Long Mazor.