Cardinal Health Inc. cut its fiscal 2009 profit estimates Thursday, saying it expects hospitals to keep delaying equipment purchases.
Cardinal now expects a profit of $3.50 to $3.60 per share, excluding items, down from previous guidance of $3.80 to $3.95 per share. Analysts expect, on average, a profit of $3.76 per share for the year ending in June, according to a Thomson Reuters poll.
R. Kerry Clark, chief executive of Cardinal, said in a statement that the company "is taking appropriate cost actions to mitigate the impact" of changes in hospital spending patterns.
Cardinal said the deferrals are hurting its clinical and medical-products business. In recent months, medical-technology companies have said hospitals are holding off on equipment sales due to the U.S. recession.
Cardinal Health shares fell 44 cents to $35.46 in morning trading.
In October, CMP Chief Executive David Schlotterbeck said reduced hospital spending was likely to hurt the clinical and medical-products business, but at the time, the company said it was not clear how that would affect its results for the rest of the year.
Wall Street's profit estimates include a full year of results for the clinical and medical-products business, which is Cardinal Health's most profitable. The company is in the process of spinning off the CMP unit into a separate publicly traded company, which will be lead by Schlotterbeck.
The clinical and medical-products business sells devices used in infusion, medication and surgical procedures. For the full year, Cardinal Health said the unit will report results that are equal to, or better than, its totals from fiscal 2008. It noted that more than 40 percent of CMP revenue comes from sales of disposable products, and demand for those items has remained steady.
Cardinal Health forecast a larger-than-expected profit for the fiscal second quarter, which ended in December. Due to solid results and a lower tax rate, the company said it will earn at least 90 cents per share. Analysts expected a profit of 85 cents per share.
The Dublin, Ohio, company maintained its expectations for its largest business, healthcare supply chain services. For that unit, Cardinal said revenue will grow more than 6 percent from fiscal 2008, and profit will be flat to down five percent due to weakness in the first half of the fiscal year.
In fiscal 2008, that business posted a profit of $1.1 billion, on $79.3 billion in revenue. Cardinal Health's total revenue for the year was $91 billion.