U.S. drug distributor Cardinal Health reported a lower-than-expected quarterly profit on Thursday and cut its annual earnings forecast as its medical device unit Cordis was hit by supply chain issues and higher costs.
Cardinal’s shares plunged 18 percent on Thursday.
Chief Executive Mike Kaufmann said the company is moving aggressively to address operational and supply chain issues at Cordis.
Cordis, which makes devices such as catheters and stents, was bought from Johnson & Johnson in 2015, and has been underperforming over the past few quarters.
The company’s medical segment, which houses the Cordis unit, brought in sales of $3.9 billion in the third quarter ended March 31, below analysts’ estimates of $4.1 billion, according to Evercore ISI.
However, sales from the company’s pharmaceuticals division, its largest by revenue, climbed 5 percent to $29.7 billion, surpassing Evercore estimates.
Rival AmerisourceBergen on Wednesday posted better-than-expected quarterly profit, sending its shares and those of its peers higher.
Excluding items, Cardinal earned $1.39 per share. Analysts were expecting $1.51 per share, according to Thomson Reuters I/B/E/S.
The company cut its fiscal 2018 adjusted earnings forecast to $4.85-$4.95 per share from $5.25-$5.50 per share, reflecting a negative tax rate and Cordis’s performance.
Net earnings attributable to the company fell 33 percent to $255 million, or $0.81 per share, in the quarter.
Revenue rose 5.7 percent to $33.63 billion.