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Cardinal Health CAH announced that it is progressing well with its planned business and portfolio review, including an updated enterprise operating and segment reporting structure. The company has identified businesses with strong growth potential. It has also altered its reporting structure to focus on core businesses and identify key growth areas, and enable greater efficiency across all its businesses. CAH also provided an updated earnings outlook for fiscal 2024.
These strategic moves signify the company's commitment to long-term value creation, efficiency and a streamlined approach. In its pursuit of becoming a streamlined and focused organization, Cardinal Health is also reorganizing its leadership structure.
Price Performance
In the past year, CAH’s shares have risen 35.1% compared with the industry’s growth of 10.8%. The S&P 500 Index has gained 21.2% in the same time frame.
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Business and Portfolio Review Update
Cardinal Health has completed the review of growth businesses within the Medical Segment, identifying at-Home Solutions and OptiFreight Logistics as key areas for long-term value creation. The decision to invest further in these sectors aligns with industry trends, particularly the shift of healthcare services to home. Cardinal Health's at-Home Solutions, a leading provider of home healthcare medical supplies, is set to expand its distribution network with a new facility in Texas, alongside the existing facility in Ohio.
OptiFreight Logistics is a top-notch healthcare logistics provider that manages more than 21 million shipments annually. The business has achieved profitable growth on the back of its own technology and expertise. It keeps investing in new and tech-based solutions, such as TotalVue Insights, which should help healthcare supply-chain leaders to improve their transportation and logistics processes and save on shipping costs.
The ongoing review of the Global Medical Products and Distribution business looks promising and is a priority for sustained success.
Operating and Segment Reporting Structure Update
Effective Jan 1, 2024, Cardinal Health has realigned its operating and segment reporting structure. The Pharmaceutical and Specialty Solutions Segment, led by Debbie Weitzman, comprises of resilient Pharmaceutical Distribution and higher-growth Specialty businesses. The Global Medical Products and Distribution (“GMPD”) segment, under the leadership of Steve Mason, focuses on U.S. and International Products and Distribution businesses.
The businesses identified by Cardinal Health for long-term growth — at-Home Solutions, OptiFreight Logistics, Nuclear, and Precision Health Solutions — will be reported under the “Other” category.