Cardinal Health, Inc. (CAH) yesterday entered into a five-year, laboratory products supply agreement with Novation, one of the largest group purchasing organizations (GPOs) in the U.S. Per the agreement, Cardinal Health will exclusively provide laboratory products to Novation’s clinical members, such as hospital laboratories, blood banks, core laboratories and reference laboratories.

The agreement is effective from Oct. 1, 2009 and runs until 2014. Financial terms of the agreement have not been disclosed. Cardinal’s stock reacted positively to the news, with the price increasing roughly 1.4% to $27.70 at the end of Sept. 28, 2009.

Cardinal Health is one of the largest global healthcare companies which helps pharmacies, hospitals and ambulatory care sites to focus on low-cost patient care. The company is also a leading manufacturer of medical and surgical products.

Cardinal Health recently completed the spin-off of its Clinical and Medical Products business to form a subsidiary, CareFusion Corporation (CFN). The company’s primary competitors include AmerisourceBergen Corporation (ABC) and McKesson Corporation (MCK).

Cardinal Health reported its fourth quarter and full fiscal year 2009 results. For the quarter, earnings per share were 86 cents, compared to 96 cents in the year-ago quarter but in line with the Zacks Consensus Estimate. For the year, earnings per share were $3.48, lower than last year’s earnings per share of $3.75 and the Zacks Consensus Estimate of $3.50. Based on the company’s performance, we have assigned a Neutral rating to the stock.
Read the full analyst report on “CAH”
Read the full analyst report on “CFN”
Read the full analyst report on “ABC”
Read the full analyst report on “MCK”
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