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McKesson Reports Fiscal 2013 Second-Quarter Results

Stocks in this article: MCK

McKesson Corporation (NYSE: MCK) today reported that revenues for the second quarter ended September 30, 2012 were $29.9 billion, down 1% compared to $30.2 billion a year ago. On the basis of U.S. generally accepted accounting principles (“GAAP”), second-quarter earnings per diluted share was $1.67 compared to $1.18 a year ago.

Second-quarter GAAP results included a pre-tax charge of $44 million, recorded in the Distribution Solutions segment, to increase an existing litigation reserve for claims against McKesson relating to First DataBank’s published drug reimbursement benchmarks, commonly referred to as Average Whole Prices (“AWP”).

Second-quarter Adjusted Earnings per diluted share was $1.92, up 18% compared to $1.63 a year ago.

For the first half of the fiscal year, McKesson generated cash from operations of $459 million, and ended the quarter with cash and cash equivalents of $2.8 billion. During the first half of the fiscal year, the company paid $100 million in dividends, had internal capital spending of $167 million and spent $251 million on acquisitions.

“McKesson delivered another quarter of solid operating performance,” said John H. Hammergren, chairman and chief executive officer. “I am pleased with our accomplishments during the first half of our fiscal year. Based on our performance to date, we are updating our previous outlook for the fiscal year and now expect Adjusted Earnings per diluted share of $7.15 to $7.35 for the fiscal year ending March 31, 2013.”

Distribution Solutions revenues were down 1% in the second quarter, driven mainly by a 1% decline in U.S. pharmaceutical distribution revenues, reflecting brand-to-generic conversions and one fewer sales day.

Canadian revenues, on a constant currency basis, decreased 3% for the second quarter. Including the unfavorable currency impact of 2%, Canadian revenues decreased 5% for the second quarter.

Medical-Surgical distribution and services revenues were flat for the quarter, due to the impact of five fewer sales days.

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