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UPDATE 2-Cardinal Health beats profit estimates on acquisition, raises forecast

forecast@ (Adds details on medical unit, Medtronic acquisition, share repurchase program)

Feb 8 (Reuters) - Cardinal Health reported a better-than-expected quarterly profit as its purchase of Medtronic Plc's patient recovery business started to pay off, and the drug distributor raised its fiscal 2018 adjusted profit forecast.

The company's medical unit, which absorbed the Medtronic business, posted a 19 percent jump in quarterly revenue to $4 billion as it sold more branded medical and surgical products. However, quarterly profit in Cardinal's largest business, the pharmaceuticals unit that distributes generic and branded drugs, fell 4 percent to $514 million, hurt partly by the performance of its generic drug program.

A steep decline in prices of generic drugs has hurt the pharmaceutical supply chain in the past few quarters but rivals McKesson Corp and AmerisourceBergen Corp have said that prices have started to stabilize. Net earnings attributable to the company rose to $1.05 billion, or $3.33 per share, in the second quarter ended Dec. 31, from $324 million, or $1.02 per share, a year ago.

The Dublin, Ohio-based company recorded a $736 million benefit from income taxes, and said its board had authorized a $1 billion share repurchase program.

The company also raised its 2018 earnings outlook to $5.25-$5.50 per share from $4.85-$5.10 per share.

Analysts expect fiscal 2018 earnings of $5.14 per share, according to Thomson Reuters I/B/E/S.

Excluding items, the company earned $1.51 per share in the quarter.

Analysts on average had estimated second-quarter earnings of $1.15 per share, according to Thomson Reuters I/B/E/S.

Revenue rose to $35.19 billion from $33.15 billion. (Reporting by Manas Mishra in Bengaluru; Editing by Martina D'Couto and Shailesh Kuber)