McKesson Swings to Profit

Earnings beat targets.
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McKesson

(MCK) - Get Report

posted a solid third quarter and set a $250 million stock buyback plan.

The San Francisco-based drug distributor made $193 million, or 61 cents a share, reversing from the year-ago litigation-charge-saddled loss of $666 million, or $2.26 a share. Revenue rose 9% from a year ago to $22.6 billion. Analysts were looking for a 53-cent profit.

The quarter's results include a $37 million pretax gain in Pharmaceutical Solutions from a previously disclosed antitrust settlement, and a $15 million pretax charge in Medical-Surgical Solutions to expense pre-payments associated with a software product licensed from a third party.

"McKesson had an outstanding quarter, driven by strong operating results in our Pharmaceutical Solutions and Provider Technologies segments," said CEO John H. Hammergren.

Based on earning $1.76 per diluted share from continuing operations through the first three quarters excluding the $35 million first-quarter after-tax adjustment to the securities litigation reserve, McKesson said it expects to earn 65 to 70 cents per diluted share in the fourth quarter. Analysts surveyed by Thomson First Call were looking for 69 cents.