A challenging environment peppered with inflation and supply chain woes has taken a toll on Cardinal Health’s earnings for the quarter. The Dublin, Ohio-based company failed to meet consensus and had a GAAP loss of $97 million, due to a non-cash, pre-tax goodwill impairment of $474 million in the medical segment.

The firm noted, it was also updating its medical segment profit outlook to a 45% to 55% percent decline, from a 30% to 45% decline. The fiscal year 2022 outlook for medical segment profit includes a year-over-year net incremental headwind of nearly $300 million due to inflationary and global supply chain constraint impacts.

Cardinal Health’s earnings per share decreased 5% to 1.45%. News of the company’s troubled earnings caused shares to drop a little more than 5% on Thursday. It isn't the first time medtech stocks have been impacted because of supply chain issues. Several companies reported similar pains with the supply chain last month. 

The company updated guidance for EPS ranging from $5.15 to $5.25 – a decrease from the original guidance of $5.15 to $5.50.

“In medical, our core U.S. medical products and distribution business continues to experience unprecedented inflationary impacts and global supply chain constraints,” Kaufmann said, according to a transcript from Seeking Alpha. “We continue to take action to mitigate the effects of these global challenges on our business, including taking pricing actions, evolving our commercial contracting strategies, and investing in additional supply chain capacity. While we remain confident these actions will deliver value and are encouraged by the other areas of our medical business and our opportunities for long-term growth, the current environment remains highly dynamic.”

Despite the issues, Kauffman said the company has no plans to divest the struggling medical supply business, according to a report from Columbus Business First.

MD+DI has extensively covered the supply chain crisis. It was a hot topic that was featured prominently on episode 40 of Let's Talk Medtech. See below for the entire episode.