Radiopharmaceutical supplier Cardinal Health has appointed chief financial officer (CFO) Mike Kaufmann as its new CEO, effective January 1, 2018.
Kaufmann will replace George Barrett, who has served as chairman and CEO of Cardinal Health since 2009. Barrett will stay on, however, as executive chairman of the board of directors through the annual shareholders meeting in November 2018, according to the company. Gregory Kenny, the company's lead independent director, will then assume the role of nonexecutive chairman.
As part of the succession plan, Jorge Gomez will replace Kaufman as CFO. A 12-year veteran of Cardinal Health, Gomez is currently the senior vice president and CFO of the firm's medical segment and was previously the CFO of the company's pharmaceutical segment.
In other Cardinal Health news, the company reported a slight increase in revenue as well as sharply lower profitability for its fiscal 2018 first quarter. For the period (end-September 30), the firm had total revenues of $32.6 billion, up 2% from the $32 billion reported in the first quarter of fiscal 2017.
Cardinal Health had net earnings of $115 million, down 63% from the $309 million reported in the same period a year ago. The company noted that it had signed an agreement during the quarter to regain direct distribution of self-manufactured surgeon gloves in certain international markets. Operating earnings during the quarter were reduced by restructuring costs associated with this agreement, as well as increased amortization of acquisition-related intangible assets as a result of the Patient Recovery business acquisition, the vendor said.
Cardinal Health's pharmaceutical segment, which includes its nuclear medicine operations, had fiscal first-quarter revenue of $28.9 billion, up 1% from $28.8 billion in the same period last year. Segment profit was $467 million, down from the $534 million reported in the first quarter of 2017.
The first-quarter revenue gain was attributed to sales growth from specialty and pharmaceutical distribution customers, although that increase was partially offset by a previously announced expiration of a large, mail-order customer contract. Profitability was affected by a negative impact of generic pharmaceutical pricing changes -- partially offset by the benefits from Red Oak Sourcing, according to Cardinal Health. The company said that costs related to its ongoing investment in a pharmaceutical IT platform also contributed to the lower profitability for the quarter.
