McKesson Profit Declines On Charges

(RTTNews) - Drug distributor McKesson Corp (MCK), Tuesday said its fourth-quarter profit plummeted 64 percent, hurt by litigation charges and loss from discontinued operations. Meanwhile, the company's revenue surged 19 percent, driven by growth at its distribution solutions segment and other businesses.

The company detailed its earnings forecast for the full year 2016, and announced a $500 million share buyback program.

McKesson, based in San Francisco, California, posted quarterly net earnings of $132 million or $0.56 per share, compared with $370 million or $1.58 per share last year.

Results for the quarter include litigation reserve adjustments of $150 million and loss from discontinued operations of $267 million, among other items.

Excluding items, adjusted earnings for the quarter were $2.94 per share, compared with $2.71 per share a year ago.

On average, 17 analysts polled by Thomson Reuters estimated earnings of $2.75 per share for the quarter. Analysts' estimates typically exclude special items.

McKesson said its revenues for the quarter increased 19 percent to $44.92 billion from $37.83 billion in the prior year.

Fourteen analysts had a consensus revenue estimate of $45.04 billion for the quarter.

"Our fourth-quarter results wrapped up another year of outstanding earnings growth, led by strong execution in our Distribution Solutions segment," said CEO John Hammergren.

Revenue at the company's distribution solutions segment climbed 19 percent year-over-year, and North America pharmaceutical distribution and services revenue gained 18 percent.

International pharmaceutical distribution and services revenue rose 3 percent, while Medical-Surgical distribution and services revenue increased 5 percent.

Revenue at its technology solutions segment slid 10 percent, hurt by decline in hospital software business, the elimination of a product line, and the winding down of its international technology business.

For the full year 2016, McKesson expects adjusted earnings of $12.20 to $12.70 per share, while analysts expect $12.57 per share.

MCK closed Tuesday at $229.55, up $1.01 or 0.44%, on a volume of 1.3 million shares on the NYSE. In after hours, the stock gained $0.93 or 0.41% at $230.48.