Shares of drug distributor McKesson (MCK) - Get Report rose 7.5% in after-hours trading on Thursday after the company reported fourth-quarter fiscal 2017 adjusted earnings that exceeded analysts' expectations.
The San Francisco-based firm reported adjusted earnings per diluted share of $3.39. Excluding charges in connection with the firm's cost alignment plan announced in March 2016, adjusted EPS was $3.42, up 8% from the year-ago period. Revenue during the quarter rose 4% to $48.7 billion but came in lower than analysts' estimates.
Analysts polled by FactSet Research Systems had forecast adjusted EPS of $3 on revenue of $49.48 billion.
Shares of McKesson were changing hands at $152. The company has a market capitalization of $29.40 billion.
McKesson on Thursday said is is tweaking its definition of adjusted earnings "to closely align with management's view of the company's operating performance and portfolio of businesses."
On a revised basis, McKesson's recast fiscal 2017 adjusted earnings per diluted share was $12.54 per diluted share.
As for the fiscal year ending March 31, 2018, McKesson said it expects GAAP earnings per diluted share of $7.10 to $8.80 and adjusted earnings per diluted share of $11.75 to $12.45.
Analysts have forecast, on average, adjusted EPS of f $11.45 for fiscal year 2018, according to FactSet.
"Our fiscal 2018 outlook incorporates headwinds related to the lapping effect of the competitive customer pricing environment and branded pharmaceutical manufacturer pricing trends, partially offset by our capital deployment efforts and solid growth across our businesses," said McKesson chairman and CEO John H. Hammergren, in a statement.
The forecast was being looked to by analysts more than the fourth quarter numbers. The fourth quarter is "less relevant than the guidance McKesson will set," said Credit Suisse analyst Robert Willoughby in a phone interview earlier this week.
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