McKesson Reports Fiscal 2018 First-Quarter Results

McKesson Corporation (NYSE:MCK) today reported that revenues for the first quarter ended June 30, 2017 were $51.1 billion, up 3% compared to $49.7 billion a year ago. On the basis of U.S. generally accepted accounting principles ("GAAP"), first-quarter earnings per diluted share from continuing operations was $1.44, compared to $2.88 a year ago.

First-quarter Adjusted Earnings per diluted share was $2.46, down 22% compared to $3.15 a year ago. First-quarter results included the lapping effect of the lower profit contribution from increased price competition in our independent pharmacy business in Fiscal 2017 and weaker pharmaceutical manufacturer pricing trends in our U.S. Pharmaceutical business within our Distribution Solutions segment, and lower profit in our Technology Solutions segment driven primarily by the contribution of the majority of the businesses to Change Healthcare.

For the first quarter, McKesson generated cash from operations of $741 million, and ended the quarter with cash and cash equivalents of $2.3 billion. During the quarter, McKesson repaid $541 million in long-term debt, paid $1.5 billion for acquisitions, repurchased $250 million of its common stock, invested $118 million internally and paid $62 million in dividends. Yesterday, the Board of Directors approved an increase to the quarterly dividend from 28 cents to 34 cents per share.

"McKesson's first-quarter operating results were consistent with our expectations," said John H. Hammergren, chairman and chief executive officer. "We're off to a solid start to the year and are raising our previous Fiscal 2018 Adjusted Earnings outlook to a range of $11.80 to $12.50 per diluted share. In addition, we generated strong first-quarter cash flows, which allowed us to allocate capital in line with our portfolio approach to capital deployment."

Segment Results

Distribution Solutions revenues were $50.9 billion for the quarter, up 4% on a reported basis and 5% on a constant currency basis.

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