:max_bytes(150000):strip_icc()/GettyImages-1411737570-d1ccb0089bd344558221527e0fee2a42.jpg "Cardinal Health Loses Contracts With UnitedHealth’s OptumRX, Stock Slips")
:max_bytes(150000):strip_icc():format(jpeg)/GettyImages-1411737570-d1ccb0089bd344558221527e0fee2a42.jpg)
Key Takeaways
- Cardinal Health said its contracts with the pharmacy benefits provider of UnitedHealth Group, OptumRX, won’t be renewed, and shares fell in intraday trading Monday.
- The health insurer noted that sales to OptumRX provided 16% of Cardinal Health’s 2023 revenue.
- Cardinal Health explained that even with losing the contracts, it was affirming its outlook for this year and beyond.
Cardinal Health (CAH) shares fell in intraday trading Monday after the health insurer provider reported that its contracts with UnitedHealth Group’s (UNH) pharmacy benefits subsidiary won’t be renewed.
The company explained that the agreements with OptumRX will expire at the end of June. It noted sales to OptumRX provided 16% of its revenue in 2023.
Cardinal Health noted that it anticipates partially offsetting the impact “through a combination of new customer wins, specialty growth and other actions.”
In addition, the company affirmed its 2024 adjusted earnings per share (EPS) guidance of $7.20 to $7.35, as well as both its Pharmaceutical and Specialty Solutions long-term segment profit compound annual growth rate (CAGR) of 4% to 6% and its consolidated adjusted EPS CAGR target of 12% to 14% for fiscal years 2024 to 2026.
Chief Executive Officer (CEO) Jason Hollar said Cardinal Health remains “confident in the resiliency and strong value proposition of our business.”
Shares of Cardinal Health were down 5% to $102.78 as of 1:31 p.m. ET Monday.