Bird's-eye view

18 April 2017 By Robert Cyran Follow @rob_cyran

The U.S. pill distributor said for the third time since October that falling prices would hurt profit. Cardinal Health underscored the hard times ahead by paying $6 bln for Medtronic’s medical-supplies unit to diversify. Other links in the pharmaceuticals chain will suffer, too.

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Cardinal Health said on April 18 it had agreed to buy Medtronic's medical-supplies unit for $6.1 billion. It intends to fund the purchase with $4.5 billion of new senior unsecured notes and cash on hand.

The U.S. drug distributor also said adjusted earnings for the year would be at the bottom of the expected range, and flat to down in the mid-single digits for 2018, due to declining generic-drug prices. Analysts had expected earnings to rise 9 percent, according to Thomson Reuters data. This is Cardinal’s third profit warning since October.

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