McKesson sees small dip in net income for Q3
McKesson has reported a 1 percent drop in net income for the fiscal third quarter, which ended Dec. 31, 2012, even though the revenues were up 1 percent. The company also lowered fiscal year expectations slightly.
The revenues for the third quarter were $31.2 billion, up 1 percent compared with $30.8 billion one year ago. However, the net income was down 1 percent to $298 million in the same quarter-over-quarter period.
The distribution solutions unit revenues were up 1 percent in the third quarter, driven mainly by growth in the U.S. pharmaceutical direct distribution and services business and growth in its medical-surgical distribution business. Specifically, the medical-surgical distribution and services revenues were up 15 percent for the third quarter, driven by market growth, new customers, acquisitions and one additional sales day, according to the company.
In the 2012 third quarter, on the basis of U.S. generally accepted accounting principles (GAAP), the distribution solutions operating profit was $525 million, compared with $510 in the previous year’s third quarter. Distribution solutions third quarter segment results include a $40 million pre-tax charge related to a legal dispute in McKesson's Canadian business.
The revenues for the technology solutions unit were flat in the third quarter compared with the prior year. GAAP operating profit was $79 million for the third quarter, compared with $69 million in the 2011 third quarter. McKesson said its technology solutions third quarter segment results were impacted by revenue deferral in its international business.
The San Francisco-based company also repurchased $360 million of its common stock during the third quarter.
“Our full year view of the operating performance in our distribution solutions segment is now better than our original expectations, and our full year view of the operating performance in the primary businesses in technology solution remains unchanged,” said John H. Hammergren, chairman and CEO of McKesson. “This operating strength is offset by the charge in our Canadian business and revenue deferral in our international technology business, and as a result we are updating our previous outlook for the fiscal year and now expect adjusted earnings per diluted share of $7.10 to $7.30 for the fiscal year, ending March 31.”