CareFusion Beats Zacks Estimate - Analyst Blog

CareFusion Corporation (CFN) recently reported second quarter fiscal 2010 earnings per share of 39 cents, marginally beating the Zacks Consensus Estimate of 38 cents, but lower than the year-ago earnings of 50 cents.

Total revenues in the second quarter increased 5% year over year to $1.0 billion. Growth was witnessed across all business segments.

Critical Care Technologies revenues increased 1% year over year to $682 million as a result of higher demand for the company’s respiratory business. Medical Technologies and Services revenues increased 15% year over year to $337 million. Growth was driven by higher sales from the company’s International Surgical Products and Interventional Specialties businesses.

CareFusion reported a contraction in margins in the second quarter. Adjusted gross margin declined 200 basis points (bps) year over year to 46.9%. Adjusted operating margin declined 370 bps year over year to 14.6%. Adjusted net margin declined 280 bps year over year to 8.6%. Adjusted figures exclude non-recurring items related to the spin-off of CareFusion and divestiture of the company’s audiology business.

CareFusion expects total revenues in fiscal 2010 to range between $3.95 billion and $4.05 billion, compared to the previous guidance of $3.85 billion to $4.0 billion. Earnings per share are expected in the range of $1.40 to $1.45, compared to the previous guidance of $1.35 to $1.45. The number of diluted shares outstanding should be roughly 223 million.

CareFusion is a medical technology company formed by the spin-off of the Clinical and Medical Products business of Cardinal Health, Inc. (CAH). The spin-off was completed in 2009 through a pro rata distribution of roughly 81% of CareFusion’s common stock.