Good day, and welcome to Cardinal Health conference call. Today's call is being recorded. If you'd like to ask a question, please press star one on your telephone keypad. In the interest of time, we kindly ask you to limit yourself to one question only. At this time, I'll now turn the call over to Matt Sims, Vice President, Investor Relations. Please go ahead, sir.
Welcome to this morning's conference call, and thank you for joining us. With me today are Cardinal Health CEO, Jason Hollar, and our CFO, Aaron Alt. You can find this morning's press release and investor presentation on the IR section of our website at ir.cardinalhealth.com. Before I turn the call over to Jason, since we will be making forward-looking statements today, let me remind you that the matters addressed in the statement are subject to risks and uncertainties that could cause actual results to differ materially from those projected or implied. Please refer to our SEC filings and the forward-looking statement slide at the beginning of our presentation for a description of these risks and uncertainties. For the Q&A portion of today's call, we kindly ask that you limit questions to one per participant so that we can try and give everyone an opportunity.
With that, I'll now turn the call over to Jason.
Good morning, everyone, and thank you for joining us. Later today, we will be participating in a healthcare industry conference and interacting with many of our shareholders. We'll be discussing several exciting announcements regarding how we continue to drive our company and healthcare forward, building upon our momentum and the plans we outlined at Investor Day. We continue to take action to become a simplified and more focused company. The purpose of our call this morning is to provide the key updates and announcements to all of our stakeholders at the same time. First, an update on our ongoing business and portfolio review. As a reminder, our recent business review efforts have been focused on the Medical segment following the pharma-centric conclusions we shared back in June.
With strong collaboration and engagement from our business review committee and full board, we have continued to make progress reviewing our businesses through the lens of the framework we discussed at Investor Day. This morning, we announced that we have completed the review of our growth businesses within the Medical segment, at-Home Solutions and OptiFreight Logistics, and have determined that retaining, investing in, and further developing these growth businesses will drive the most significant long-term shareholder value creation for Cardinal Health. Similar to the conclusions we made at Investor Day with respect to our Nuclear & Precision Health Solutions business, both of these businesses are leaders in their respective areas, operate in attractive markets, and offer above-average margin profiles and strong long-term growth prospects.
With industry trends of care shifting to the home, our At-Home Solutions business is well positioned to continue to accelerate in the coming years and deliver on its contribution toward our long-term targets as previously outlined in the Medical Improvement Plan. This business has grown from approximately $1 billion in revenue when first acquired by Cardinal Health in 2013 as AssuraMed, to $2.6 billion in revenue in fiscal 2023. We see a long runway of future growth for this business, and to support the increased demand we are seeing, we are investing to expand our distribution network. Today, we are announcing further expansion plans with a new distribution center to be built in Texas, with increased capacity, advanced automation technology, and robotics within the facility.
This is in addition to the recently opened site in Ohio and the previously announced expansion underway in South Carolina, set to open this calendar year. Our OptiFreight Logistics business is a leader in healthcare logistics management and is trusted to deliver solutions that support the unique shipping and logistics needs of healthcare providers, from acute care hospitals, ambulatory surgery centers, independent reference labs, and independent pharmacies. Powered by our proprietary technology and our team's deep expertise, this business services 17 of Gartner's top 25 supply chain health systems and manages over 21 million packages annually, delivering over $700 million in aggregate annual shipping and logistics expense savings to our healthcare provider customers. OptiFreight has a strong operational track record of profitable growth over many years. To sustain our strong performance, we are continuing to invest in innovative and technology-driven solutions such as our Total Vue Insights platform.
This suite of analytical and tracking tools is intuitive and data-rich, enabling healthcare supply chain leaders to better manage their shipping spend and support the ongoing volume growth that we expect in this business. Now, while we are pleased to be able to share these updates on our portfolio review, this is an ongoing journey. Our review of the core Medical business, what we refer to as Global Medical Products and Distribution, or GMPD, continues. GMPD was the part of the business most challenged during the COVID crisis due to inflation and supply chain disruption. The team continues to prioritize and are making excellent progress on turning around the operational performance of this business through our Medical Improvement Plan. Aaron will shortly share specific financial performance for this part of the Medical business for the first time publicly.
We plan to continue providing future updates on the GMPD business during our quarterly earnings calls as appropriate, so our comments today are going to be very consistent with what I've said in the past, which is, regardless of the appropriate long-term course of action for the business, executing the Medical Improvement Plan and serving our customers remain the most critical near-term priority. For example, for our mitigation initiatives, we've offset over 70% of the impact of inflation and global supply chain constraints as of the first quarter and have noted that we expect to address these impacts by the end of fiscal 2024.
Our five-point plan to grow Cardinal Health brand volume has yielded improvements not only in our leading indicators, which are significantly improved compared to pandemic lows, but we're seeing these efforts result in strong customer retention and slight Cardinal Health brand volume growth in the first half of the fiscal year. We continue to drive simplification and optimize our cost structure by exiting non-core product lines, rationalizing our network, and streamlining our international footprint. These collective actions by our team have contributed to back-to-back quarters of significantly improved profitability for the Medical segment, beginning in Q4 of last year, and for the GMPD business in particular. Now, stepping back, much of our company's success over the past 12-18 months is a direct result of our team ruthlessly prioritizing simplification and operational execution in our resilient core business.
We can best continue our progress by reorganizing our leadership structure. We believe that this will drive efficiency, accountability, and transparency in support of long-term value creation. To that end, today, we are also announcing an updated operating and segment reporting structure for the enterprise, which is effective January 1st, 2024. Beginning with our updated Pharmaceutical and Specialty Solutions segment, under the leadership of Debbie Weitzman. As we've observed over the past 15 months in her role leading the former Pharmaceutical segment, Debbie and her team have done a tremendous job driving the improved performance of our business. The change here is simple. With our simplified structure that enables even more focus and visibility, the segment no longer includes our Nuclear & Precision Health Solutions business, which I will come back to momentarily.
You'll recall, when I was appointed to CEO, we reorganized the Pharma segment to bring greater connectivity to our resilient Pharmaceutical Distribution business and our higher growth specialty business, which is a strategic area of focus for us and includes both downstream Specialty Distribution and upstream Manufacturer Services. Over the past several quarters, we've seen continued strength in our business by prioritizing operational execution in the core. We believe that this new segment structure further enables those efforts and positions the business for continued long-term growth and investment, both organically and through future M&A. Our positive long-term views on this segment continue. We are positioned at the forefront of favorable secular industry trends, such as increasing demand from an aging U.S. population, an ongoing pipeline of brand to generic loss of exclusivity, continued biopharma innovation, and increasing access to and adoption of more cost-effective therapies such as biosimilars.
We remain focused on expanding in specialty, both downstream and upstream, and we'll continue to invest to accelerate our strategy. This includes our platform and capabilities for our new Navista Network in oncology and expansion opportunities across the breadth of other non-oncology therapeutic areas, which represent 60% of the market, like we did previously with our Bend care investment in rheumatology. Turning to Medical, we have spent considerable time reviewing the Medical segment from all angles, and while some of that work remains ongoing, we have reached conclusions about what we refer to as our growth business within M edical. At-Home Solutions and OptiFreight Logistics each have unique market dynamics and exciting opportunities for investment that are quite distinct from those in the Global Medical Products and Distribution business.
As such, we believe these businesses can be most successful and managed most effectively as separate operating segments and have restructured them accordingly. Steve Mason, previously Medical Segment CEO, now leads our global medical products and distribution business, which, as the name suggests, consists of both the U.S. and international products and distribution businesses, along with our WaveMark business. Steve is an experienced industry leader, and his expertise has been pivotal in the progress we've made thus far in this business with the Medical Improvement Plan. His leadership will continue to be critical as he and his team drive those initiatives forward with an ongoing focus on servicing the needs of our customers every day. We're continuing to invest in the resiliency of our supply chain and our manufacturing and distribution capacity.
For example, we're investing in new machinery in our Greenwood, South Carolina, manufacturing plant to meet growing demand for adult incontinence products, one of our core Cardinal Health brand product categories. These investments will provide additional capacity to grow our product reach across the acute care, long-term care, and home care channels and improve the customer experience. In the past 12 months, we have opened three new distribution centers in the New York, Ohio Valley, and Toronto areas. These distribution centers have been designed for state-of-the-art automation and flow efficiency to streamline operations while adding capacity for growth. In alignment with disciplined portfolio management, we are continuing to invest in new product innovation and portfolio expansion in key categories.
In November, we announced the launch of a new breathable surgical gown within our leading SmartGown brand, SmartGown Edge, which is the first pocketed surgical gown of its kind, designed to improve efficiency within the operating room. These are just a few examples of the critical work that is underway, which we believe our new structure will further enable as we continue to execute the Medical Improvement Plan, deliver value for customers, and keep you appraised of the findings from the business review. That leaves our at-Home Solutions business led by Rob Schlissberg, our OptiFreight Logistics business led by Emily Gallo, and our Nuclear & Precision Health Solutions business led by Mike Pintek. To reinforce our focus on performance and our purposeful investment in growth, these leaders will now report directly to me.
While these are three distinct businesses that will continue to operate independently, each is well-positioned as a leader in attractive markets with favorable industry trends: home healthcare, freight management, and precision healthcare. Each of these businesses is led by a tenured management team with deep healthcare and sector-specific expertise. Along with specialties, we are prioritizing these areas as key long-term growth drivers and investment opportunities for the enterprise, including potential inorganic investment. I already shared our excitement around the long-term potential of our at-Home Solutions and OptiFreight Logistics businesses. Let me take a moment to reflect on Nuclear, where our positive views have only been further reinforced since we decided to retain and further invest in the business back in June.
We continue to see increased demand in the large and growing U.S. nuclear medicine market, driven by a higher incidence of cancer and other disease states, and a continued shift from a one-size-fits-all approach to precision healthcare, requiring personalized, targeted therapies... We're also seeing the success of early radiotherapeutics, fueling manufacturer interest and investment in the clinical trial pipeline, including novel theranostics solutions. Our business, as a national provider of choice for both low and high energy radiopharmaceuticals, is positioned to win with differentiated offerings, our team's deep radiopharmaceutical expertise, and our established industry partnerships, leading to best-in-class service levels for our customers. To build upon our strong core foundation, we've highlighted our additional investments in the emerging area of theranostics, further expanding our capacity at our Center for Theranostics Advancement in Indianapolis.
Furthermore, with new FDA and reimbursement approvals for PET diagnostics and theranostics requiring a companion PET pairing, we have committed additional investments in our PET manufacturing network for greater capacity and resilience. To wrap up, before I turn it over to Aaron to provide a preliminary view of our new segments and an update to our fiscal 2024 guidance, I will close with this. Today's updates demonstrate our company's prioritization of simplification, operational execution in the core of our business, and long-term growth.
We are a stronger Cardinal Health because of the dedication of our talented employees who are driving the initiatives to move our company forward. I'm encouraged by our progress, inspired by our team's commitment to serve our customers every day, and remain bullish on our future as we continue to advance our mission as healthcare's most trusted partner and create value for our shareholders. Now, let me turn it over to Aaron.
Thank you, Jason, and good morning. We are excited to be here today. Let me begin with our fiscal 2024 enterprise guidance, which we are updating to the high end of the $6.75-$7 EPS range. We are not updating the constituent pieces of our fiscal 2024 guidance today, and we'll provide such updates in our future earnings release on February 1st, when we have complete visibility into the quarter's performance. This update is driven by anticipated favorability below the operating line in interest and other, and diluted weighted average shares outstanding, due to continued strong cash flow generation, resulting in higher than anticipated cash balances and the execution of a new $250 million accelerated share repurchase program that we completed in the second quarter.
This brings our year-to-date share repurchases to $750 million, in excess of our committed baseline repurchases of $500 million. I have told you that driving working capital efficiency has been a priority of our team, and both of these areas are enabled by our continued strong cash flow generation, which has surpassed our expectations to this point in the year. While I caution that we have not yet closed the books for Q2, I do want to provide a couple of comments with respect to our businesses as you know them today. In Pharma, while we are lapping a strong Q2 from prior year, we are seeing good overall demand, including in categories like vaccines. Many of you know that January is a big month for the Pharma business relative to brand inflation.
It is early days, though we are seeing signs of inflation generally consistent with our earlier expectations of normal inflation, but less than fiscal 2023's high point. In Medical, early views of our quarter indicate that while utilization trends, including Cardinal Health brand volumes and inflation mitigation efforts, have trended according to our expectations in the core Global Medical Products and Distribution business, we now anticipate Q2 segment profit for the former Medical segment to be generally consistent with Q1, due to anticipated non-recurring adjustments in the second quarter. These adjustments are largely tied to the at-Home Solutions and WaveMark businesses and have no impact on the Medical Improvement Plan and our progress towards fiscal 2026 targets. We are still in the process of closing our books and will provide updates on these topics as appropriate on our Q2 call.
Now, returning to more of the focus of this call and looking ahead to our updated operating and segment reporting structure, which is effective as of January 1st, the start of our fiscal Q3. As a result, we will report our Q2 results under our former segment structure and report our Q3 results according to our new segment structure, Pharmaceutical and Specialty Solutions and Global Medical Products and Distribution. Separate from these two segments, Nuclear & Precision Health Solutions, At-Home Solutions, and OptiFreight Logistics will be included in Other. To give you a better sense of the growth trends for these businesses, today, we are providing pro forma long-term targets for our updated segment reporting structure as seen on slide eight. Let me emphasize that this is not a change for Cardinal Health.
We are reiterating our long-term target of 12%-14% EPS growth for the enterprise, which includes at least $650 million in segment profits by fiscal 2026 for the former medical segment through the Medical Improvement Plan, with elements of that plan to reside in GMPD and now Other. Our long-term CAGRs continue to be anchored to the fiscal 2024-2026 period relative to our fiscal 2023 baseline, so we are also providing a recast fiscal 2023 full-year actual for modeling purposes. These prior year figures are considered preliminary and pending a final recast to be completed by our Q3 earnings release in May 2024. At that time, we plan to provide a recast of the first two quarters of fiscal year 2024 on the new segmentation.
So beginning with our updated Pharmaceutical and Specialty Solutions segment, we are pleased to maintain our long-term target for this segment, even excluding our higher growth Nuclear & Precision Health Solutions business, as we expect a 4%-6% CAGR for this business over the long term. This is enabled by the ongoing strength in our core business, including positive performance from our generics program. We also continue to expect strong performance across our higher growth specialty business. Turning to our Global Medical Products and Distribution segment. As a reminder, our core Medical business faced unprecedented challenges during the pandemic, such as extreme volatility with PPE supply and demand, variability in elective procedure demand, significant inflationary impacts, and constraints across the global supply chain. These factors contributed to significant operating losses in the business.
Over the past 15 months, we've made notable progress turning around the operating performance through the implementation and execution of the Medical Improvement Plan. We've also seen overall stabilization in the macro environment. We are encouraged by recent improvements and expect the business to return to profitability in fiscal 2024. Our long-term target for the business, consistent with the original Medical Improvement Plan, as I mentioned, is for the GMPD business to achieve approximately $300 million in that time frame. As I noted, the remaining Medical Improvement Plan contributions are incorporated into the financials of the growth businesses included in other, as we are providing visibility to the constituent pieces of the plan for the first time.
On that note, we expect the businesses included in other, at-Home Solutions, Nuclear & Precision Health Solutions, and OptiFreight Logistics, to collectively deliver an 8%-10% segment profit CAGR for the long-term period, relative to the fiscal 2023 baseline of approximately $410 million. While I noted that our long-term expectations for at-Home Solutions and OptiFreight Logistics are consistent with the former Medical Improvement Plan, our perspective on the Nuclear & Precision Health Solutions business is also unchanged. We continue to expect the business to double profits by fiscal 2026 relative to its fiscal 2021 baseline. So to summarize, a resilient Pharmaceutical and Specialty Solutions business growing 4%-6% over the long term, which we will look to bolster with M&A and specialties.
A Global Medical Products Distribution business on track with its turnaround plan for approximately $300 million in segment profit by fiscal 2026. A collection of higher margin growth businesses, which are anticipated to deliver 8%-10% profit growth over the longer term. Our continued expectation of 12%-14% long-term EPS CAGR for the enterprise, and a disciplined capital allocation strategy with a strong financial base to support further investment in our businesses or shareholder return of capital. It's a compelling story unfolding here at Cardinal Health. We appreciate your interest, and with that, we'll open it up for questions.
Thank you. As a reminder, if you have a question, please signal by pressing star one on your telephone keypad. We'll pause for just a quick moment to allow everyone an opportunity to signal for questions.
Operator, please go ahead.
We will take our first question from Eric Coldwell from Baird. Your line is open. Please go ahead.
Thank you very much, and good morning. Thanks for all the details. I realize that today is more about the three main headlines that you're presenting to us in this press release and call. But you did mention that you expect strong growth in specialty. I believe that was one of the prepared comments, and it does bring to attention some recent market chatter about one of your larger customers building an internal specialty distribution center. And I think some street concerns that perhaps that client could be shifting towards an insourcing model.
So hoping you could maybe touch on that, what you're seeing in specialty, what your, what your growth outlook is, both near and longer term, and whether you, you see any implications of, perhaps some of the larger channel customers bringing some more work in-house, if, if you could go down that path. And then if I could just throw in a quick follow-up, the mention on strong cash flow and higher cash balances. I'm curious what drove that, and could you possibly provide an update on what you're anticipating for cash flow for the year? Thank you very much.
Sure, and thanks for the questions, Eric. I'll start with a little bit more of the model question and have Aaron walk through what he can as it relates to cash flow. So, I think the primary way to think about how to answer your question, Eric, is we feel very good about our role in the distribution industry here with healthcare. So, our role is to safely, securely, and efficiently deliver products and services to our customers, and that role has never been more evident in terms of its value as it is today. Healthcare continues to get more complex.
We talked a lot recently about the benefits of innovation that even we, as a distributor, see, and as we create in our own products and services, as well as leveraging those of our manufacturer partners. So, you know, our business, our book of business, our future outlook continues to brighten with that innovation. I'm not concerned about customers, large or small, finding a better way to safely, securely, and efficiently deliver those products. We encourage our customers to work with us to find win-win opportunities. The business models will always evolve, but we have the size and scale and expertise that is unique, and we want them to leverage us in different ways, and we encourage them to find ways that they may benefit finding other benefits themselves.
But I would not see this as a wholesale model change by any means. I won't speak for the customer, but it's not something that we see as happening in the industry, generally speaking. But there's always different forms. When you think about distribution, it's a long supply chain. Different customers approach that in different ways and connect to their various needs throughout their network. And so we work with them in creative ways to find the best solution for all. Now over to Aaron for commentary on the cash flow.
Great, thanks for the question. You know, the cash flow, we have a strong business. We're generating strong profit quarter over quarter. We've talked about a couple of times, including on Investor Day, the team's focus on driving continued improvements to working capital. And those plans are really coming together such that we are generating strong, you know, cash flow for the business. We're not going to provide an updated guide on cash flow today. That will come when we get to our Q2 earnings call, when our books are closed. Our books are still open. But we were able to provide the update today because, during the course of the quarter, we saw what our cash generation was.
We executed the incremental Accelerated Share Repurchase plan of $250 million, and we still ended the quarter with more than $4 billion on the balance sheet.
Next question, please.
We will take our next question from Eric Percher, from Nephron Research. Your line is open. Please go ahead.
Thank you. Wanted to ask about the ongoing focus of the business and portfolio review. I know 15 months ago, you said step one was stabilize Medical, but you'd consider, I think it was synergy, performance, and value. As you segment these three entities, will you continue to look at the value you're deriving from core Medical? And do you view the growth businesses as dependent on Medical and Pharma, or what we used to know it that? Does Medical have the ability to stand on its own?
Yeah, thanks, Eric. In part, the conclusion that we made on these growth businesses is because they are not dependent upon medical. What's interesting growth businesses is that they have a lot of synergies throughout the enterprise, not just with medical. So there are some synergies there, but there are also some synergies with our Pharma business. And so we see that there's an opportunity for each of these three businesses, the two within Medical and, of course, Nuclear within Pharma, to continue to grow aggressively and have more opportunities through both organic and inorganic means. So they're very separable in that regard. We are not making conclusions around the Medical business because of precisely what you said, Eric.
I'm glad that you you remember our investor presentation so well. The three criteria remain the criteria that we look through in evaluating our portfolio. You referenced the strategy being, of course, the one that we think of first, to see how the synergies and dyssynergies work across the different businesses. And so we do have a number of synergies across all of these businesses. They are all in various forms of transportation, distribution, and of course, you know, healthcare with very similar customers. But each one of them have a very different distribution type of process. We specialize in different areas, and the physical distribution is often independent from one another. So we will continue to evaluate the other elements of those criteria, performance, and value.
For the Medical business, it's all been about the Medical Improvement Plan and the performance side of it. As we highlighted before, we feel we're best positioned to improve upon the results of that business and to continue that review process, and we'll provide updates as we can.
We'll take our next question from Kevin Caliendo from UBS. Your line is open. Please go ahead.
Thanks. Thanks for taking my question. I appreciate the color on all this, and it's a little bit confusing, so I appreciate it. Can you maybe talk about... You mentioned that the other segment was gonna grow 8%-10% long term. Did you provide any sort of long-term projection for the GMPD business first? And secondly, if we break out that 8%-10% between the Nuclear business and the home care and OptiFreight segments, can you maybe give us a little color on how each of those would grow within the other segment?
Yeah, let me start, and then first of all, there's a slide I think that's answering most of your questions. If I have it right, I believe it's slide 8 in this deck. So please take a look at that as I walk through this. We break out for each of the three segments because we recognize there's some confusion, and you need a bit of a map to get there. I want to stress more than anything what Aaron said in his comments, that we are not changing. Well, we're not changing our strategy, and we're not changing our long-term targets. We're remapping them to these businesses to be more reflective of a more efficient and effective structure.
What you see on slide seven is the connection back to 2023 actions, and what that means then for the long-term targets. So as we achieve these long-term targets, we would achieve the 12%-14% EPS growth. So when we think about the Pharmaceutical segment, while Nuclear is a faster-growing business, on average, than the rest of the Pharmaceutical segment, it's relatively small. A little over $1 billion of revenue, a little over $100 million of profitability. And so when you take that out, it's kind of rounding, and that the 4%-6% is still the same general map for where we expect that business to go. And then the Global Medical Products and Distribution, the original target was the $650 million.
It's still the $650 million, but you should think about that for fiscal 2026 as being $300 million for Global Medical Products and Distribution, and the balance would then be in other, combined then with the Nuclear business. So it's all there, and it's a bit of a zero-sum change as it relates to where we're going with these businesses. Did I cover everything, Aaron? Anything else to add?
I think you did, Jason. We just sort of provided a little bit more context on the Nuclear business and the profitability. I think Jason actually referenced in his comments as well, and so you can do your math, you know, relative to that. This, for us, is an exercise in financial transparency. At the same time, it's an exercise in really focusing our operations and ensuring that we're clear on our strategy, clear on execution, and thoughtful in our capital allocation.
Next question, please.
We will take our next question from Stephanie Davis, Barclays. Your line is open. Please go ahead.
Hey, folks. Congrats on the update, and thank you for taking my question. I was hoping to maybe put Eric's question another way. When you were separating out the growth businesses from Medical, are there any dyssynergies that you could outline from choosing them out and how you kind of thought about that process? And then thinking about the core Medical business now on a forward basis, which of the remaining components have the closest ties to the other segments?
Yeah. So the first part of the question there, in terms of dyssynergies, each of these three businesses, Nuclear, at-Home, and OptiFreight, operate very independently, have operated very independently in the past. There is a discrete president and an operating team because the form and nature of the products and services that they provide are quite different on a day-to-day execution. Like I said, there's a number of synergies where we get to pool our freight expense and provide leverage there, similar customers, but a very different distribution product or service basis that starts with that. So the extracting of these businesses from the existing segments does not create any discernible dyssynergies. In fact, this is an enabler for further simplification and further reductions in our cost.
And so, I would see it as more of an opportunity for ongoing cost reductions than any type of dyssynergy. And to the second part of your question, how do I think about these businesses and how they relate to the rest of the company? I don't see that OptiFreight and at-Home have more or less synergies and opportunities with Medical or Pharma. They exist with both. So they are an attractive market. They benefit from secular trends, and there are interesting opportunities throughout the enterprise. The Nuclear business is more attached to the Pharmaceutical segment. That is, you know, when you think about oncology and cell and gene and some of those opportunities for those businesses to work together.
So I see a lot less opportunity for Nuclear and Medical to work together, but I do see a lot more opportunity for OptiFreight. You know, when you think about inventory management, specialized freight services, that benefits the whole enterprise and the at-Home business. Same point, getting care into the home, that can opportunities throughout the enterprise. So I think that helps give you some further clarity and color between those.
The only other add would be the additional simplification and focus as it relates to capital allocation, as we continue to invest in the businesses for which the business review is now concluded. That is a, that is a benefit of the entire portfolio, right? And the synergies that are out there, the operations will benefit from the focus that Jason is bringing to it.
We'll take our next question from Elizabeth Anderson from Evercore. Your line is open. Please go ahead.
Hi, guys. Thanks so much for the question, and thanks for the update. Just maybe drilling in slightly more on the Nuclear business. I think at the Investor Day, you were very helpful in providing some commentary around Specialty and Nuclear, just in terms of the double-digit profit growth and the overall sort of doubling of profitability there. As we sort of think about how that portion translates into the new segments, is it sort of still right to think that that, like, double digit sort of Nuclear growth pattern? And then also, like, how do we think about, I think they're helpful in terms of framing the current profitability state, but how do we think about that in terms of the trajectory, I guess, just in terms of that profit growth split between Nuclear and Specialty? Thank you.
We continue to expect the significant growth that we had briefly called out for both the Nuclear business and the Specialty business. Our guidance of, on both parts of the business is unchanged in that way. We are just being more focused in how we both operate it internally and talk about it externally. So you should take confidence from us in our business and driving it forward.
The one other thing I would add, and I think there was a question that was getting at part of this earlier that maybe I didn't address entirely, but I think there's a bit of a desire for a couple of these questions to try and understand the various growth of the three different pieces within other, the Nuclear, at-Home, and OptiFreight. So, while we will manage these businesses independently ongoing, there's not a segment structure that goes on top of that. They will report directly to me, which is part of the reason why there's no dis-synergy, is because we're not adding on a segment leadership structure there. And while we're not going to break out the individual performance each and every quarter of these businesses, we do anticipate that each will provide meaningful growth towards this goal.
So, we don't currently believe there's going to be wide disparity of growth percentages for each of these businesses. They are similar in that they are in attractive markets, similar that they have great secular trends, similar that they're leaders in the market. So generally speaking, we think there's going to be some level of similarities in the type of growth. But again, as they are all three individually relatively small, it will not be broken out individually as we go forward, but aggregated as that reportable segment.
Next question, please.
We will take our next question from Erin Wright from Morgan Stanley. Your line is open. Please go ahead.
Great, thanks. Excuse me. So on the core distribution or Pharmaceutical distribution segment, how would you characterize, I guess, current utilization trends? You mentioned strength in vaccines. Is that COVID volume that you're capturing here? And how is pricing and volume trends shaping up relative to your expectations in that core Pharma segment? And I think this is where kind of Kevin was going with some of his question, too. But how what is the long-term underlying operating profit growth rate for that GMPD business, and on a normalized basis? Thanks.
Yeah. So, we're really pleased with the underlying utilization throughout the Pharma business, really across all of healthcare, inclusive of our Medical business utilization throughout our whole enterprise, has been relatively predictable and relatively strong. So there's no updates that we're providing today as it relates to the Pharma segment, which implies the strength that we laid out in our last guidance raise of going from the normalized 4%-6%. That's our long-term target and where we started the year. We raised that to 7%-9% this last quarter, and that was driven in part by the vaccine strength, but also just general strong utilization across the enterprise.
So there's no updates to provide you, which you know, no news is good news in our regard for this year because it's a very favorable environment for us to operate in. And as it relates to the long-term growth targets for GMPD, we're not providing that beyond fiscal 2020. There's obviously significant improvements that we're working through and still expect with the Medical Improvement Plan. We're pleased with the strong performance that we've seen over the last 12 months or so. And that you know continues to generally be the expectation to have that year-over-year growth continue over the balance of this year.
We'll provide more clarity and updates on precisely where the different pieces map to get to the approximately $7 per share, high end of the range that we've indicated today at our earnings call coming up here in several weeks.
Just to restate, the long-term target for the GMPD business is in our materials today at $300 million in fiscal year 2026. It's just aggregated on target.
We will take our next question from Daniel Grosslight. Your line is open. Please go ahead.
Hi, thanks for taking the question. On the Medical segment, it seems like the one-time items in 2Q are largely related to home health. But I'm curious if you're seeing any volatility in shipping rates due to the conflict in the Red Sea. And then in terms of the longer-term $650 million operating income guidance remaining unchanged, that's pretty clear on an aggregate basis. But I'm curious if there's been any change in how you're thinking about the cadence of achieving that target in 2024 and 2025.
With respect to the Red Sea, no-
I'm sorry, that was... The first one was on the, non-recurring items. So do you want to answer the first one?
So what we would say is the nonrecurring items are a result of we're looking at the portfolio, you know, all the time, right? And, you know, the guidance we had given on the Medical segment previously was slightly higher than Q1, and we have a modest update, with our books still open, to be generally consistent with Q1, which I had. It is tied more to the at-Home segment as we have continued to work through on materials. But look, the real point I want you to take away is we are generally pleased with the operating performance of all of our businesses, notwithstanding our preview of our earnings in three weeks, and we will provide more of an update then.
Yeah, as it relates to the Red Sea, so that just so there's a bit of a history that we all need to recall. When we had the challenges 12-18 months ago, the volatility was much more significant than what we're talking about now. So while the Red Sea is something that we're keeping an eye on, and it's a large percentage increase from where we were just a few months ago, it is a very small increase compared to where we were a few years ago. So it's much more manageable in that regard, but also, that's just that one shipping lane. When you think about the challenges we had a few years ago, it was a global increase in shipping rates, largely from Asia to the United States, but it wasn't all shipping lanes and from all directions.
More of our product goes from Asia, east to the United States versus west. And so we have less of the impact just from that nature of that. When we think about all the other countries and parts of Asia that we source from, not all of it, not even a majority of it, goes through that particular lane. So for a lot of reasons, we're not overly concerned with that, but we'll of course keep a very close eye on it, as you would imagine, given our history with that. As it relates to the cadence for 2025, I think it's implied in everything Aaron has just walked through with these non-recurring items, that they're not impacting any of the...
Long-term targets and nor the journey to get to those long-term targets. Now, we've not provided explicit guidance for 2025 in the first place. But the key components of our Medical Improvement Plan remain on track. When you think about the biggest piece of that, it's the inflation mitigation, and we have indicated that we expect that to be mitigated by the time we exit fiscal 2024, so there's no changes to that update. And we are, as I mentioned earlier, pleased with the utilization strength that we're seeing for across services, including with Med, and pleased that we've seen some growth in our Cardinal Health brand products in the first half of the year. So there's no changes to those updates either.
So we're generally on track with the key drivers of that plan, and so nothing as what we're communicating here today impacts the long term, nor the actions and steps that we anticipate along the way, which would be inclusive of 2025.
Next question, please.
Our last question is from Stephen Baxter, Wells Fargo. Your line is open. Please go ahead.
Yeah, hi. Thanks for the question. I'll stick to today's update. Could you spend just a little bit more time explaining what these adjustment items are for at-Home and WaveMark for the second quarter? And it sounds like you must have some kind of estimate on their magnitude to provide this update, so I'd appreciate if you could share what that is. And then just the second question was, you know, appreciate you're leaving the review open on, you know, the non-growth component of the Medical business. Are there implications to leaving the review open for this period of time? Definitely, when it comes up in your renewal conversations, just any color on how we should think about that would be appreciated. Thank you.
Yeah, sorry. For the second question, I got part of it. Can you just repeat that, please? Hey, Steve, can you repeat the second part of your question, please?
Yeah, yeah, sorry about that. I think I just got muted for a second. Yeah, so the second part of the question was essentially, I appreciate that you're leaving the review open on the remainder of the Medical business. You know, are there implications to leaving your review process open for so long? Is that something that comes up in renewal conversations, and how should we think about that? Thanks.
Okay. Let me start with that and then have Aaron walk through the second piece. No, because you know, when we think about everything that we're doing with this Medical business, we continue to invest heavily into it. What our customers are looking for is a commitment to the business, and w e demonstrate that commitment each and every day. Our service level and the customer CLI, the loyalty index, and how we serve them and treat them and how they feel is back to and approaching pre-pandemic levels.
So we're investing heavily to ensure that they have access to the product at the service levels that they demand, and we're treating them very, very well, and they're getting great service, and we are investing in the long term to ensure that that only gets better in the future. So, as we continue to treat our customers well, I would expect that we'll continue to have great relationships. And, you know, we're, 'cause we're treating this business like long term, like we're going to keep it. You know, there's some work that we have to do and to answer some questions, but as long as we keep doing that, I think we'll continue to have strong relationships throughout the business. Aaron?
In answer to your question about the adjustments, I would point out that, you know, during our last earnings call, we provided a quarterly indication relative to the Medical segment, as it was previously constituted and say, we expect the Q2 results to be slightly higher, you know, than Q1. We provided an update, you know, today that now we expect the results to be generally consistent, you know, with Q1. That's in connection with the ongoing business reviews and the work we do across the business, you know, every day. We do anticipate a couple of nonrecurring adjustments to Q2, largely tied to the at-Home and WaveMark businesses. We're not providing further details, you know, on those today.
We will comment further on our quarter and the constituent pieces of our quarter in a couple of weeks when we, when our books are closed, and we actually release our Q2 earnings. But we are being transparent with what we're seeing on a preliminary basis today as we, as we push ahead. But I want to emphasize that, notwithstanding nonrecurring adjustments and a slight tweak to our guidance, that the team is really pleased with the results we're seeing on the operating side of the house and this hasn't—And our adjustment has nothing to do or is notwithstanding the fact we're seeing the good results with respect to Cardinal Health brand, with respect to inflation mitigation and the other simplification actions that the team has taken.
We have no further questions, and I would like to turn the call back over to Jason Hollar for closing remarks.
Yeah, and thank you for joining us this morning, especially on such short notice. We are clearly excited to execute these changes and to continue to drive our strategy forward and look forward to continuing to keep you up to date. Thank you, have a great day.