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Cardinal Health Inc.'s (CAH) fiscal second-quarter net income dropped 2.5%, amid a charge related to plans to spin off its clinical and medical products business and as hospitals delayed purchases amid the recession and tight credit.

Spending delays by its hospital customers prompted Cardinal early last month to lower its fiscal-year earnings outlook. Nevertheless, the company is sticking with its plan to spin off its clinical and medical-products business, which has been growing faster and generating higher margins than Cardinal's much larger, core drug-distribution business.

Shares were up 4.8% at $39.42 in recent premarket trading.

Chairman and Chief Executive R. Kerry Clark has said signs of a credit-market thaw keep him optimistic that Cardinal will be able to carry out the spinoff by summer, as expected. He reaffirmed the spinoff remains on track, Thursday.

"Despite a very challenging economic climate, we had solid growth from both of our primary operating segments," the CEO said.

For the quarter ended Dec. 31, the medical supply and pharmaceutical company reported net income of $316.5 million, or 88 cents a share, down from $324.7 million, or 89 cents a share, a year earlier, below its January estimate of 90 cents a share. Excluding 5 cents in costs associated with the proposed spinoff, earnings rose to 93 cents a share from 90 cents.

Revenue rose 7.8% to $25.1 billion. Analysts polled by Thomson Reuters were expecting revenue of $24.54 billion.

Gross margin fell to 5.6% from 5.8%.

Pharmaceuticals-supply earnings rose 5.7% as revenue rose 7.8%, helped by higher sales to existing customers. Medical-segment profit rose 16% on a 7.2% revenue rise, damped by 3 percentage points by the stronger dollar.

Late last year, Robert W. Baird & Co. analyst Eric Coldwell noted that roughly a third of 15 companies selling medical and surgical instruments and clinical technologies had lowered fourth-quarter revenue growth targets over a three-week period. Coldwell also cited an American Hospital Association report that said more than half of hospitals surveyed were considering or postponing renovations or expansions, and many were delaying purchases of clinical technology or equipment and information technology.

Looking ahead, Cardinal reaffirmed its full-year estimates, reduced in early January, for earnings of $3.50 to $3.60 a share, excluding items, and left untouched its August forecast for revenue growth of 6% to 7%.

-By Mike Barris, Dow Jones Newswires; 201-938-5658; mike.barris@dowjones.com