McKesson Q2 Earnings Rise; Lifts Full-year Profit View

(RTTNews) - Healthcare services and information technology company McKesson Corp. (MCK), which earlier in the day announced its plan to buy German drug distributor Celesio AG (CAKFF.PK), said its second-quarter profit advanced from the prior year, amid an 11 percent increase in revenues. Further, the company lifted its full-year earnings forecast. The stock added 8 percent in pre-market activity.

Net income increased to $404 million from last year's $401 million. Earnings per share improved to $1.74 from $1.67 a year ago.

Adjusted earnings per share from continuing operations were $2.27, versus $1.91 last year. On average, 14 analysts polled by Thomson Reuters expected the company to report earnings of $2.04 per share for the quarter. Analysts' estimates typically exclude special items.

Quarterly revenues climbed to $32.95 billion from $29.76 billion. Analysts had a consensus revenue estimate of $32.08 billion for the period.

Distribution Solutions revenues grew 11 percent to $32.17 billion, driven mainly by strong growth in U.S. pharmaceutical direct distribution and services revenues owing to market growth, mix of business and one additional sales day.

Within the segment, Medical-Surgical distribution and services revenues surged 68 percent helped primarily by the acquisition of PSS World Medical and market growth.

Canadian revenues, on a constant currency basis, increased 14 percent, primarily due to market growth and new customer wins.

Revenue in the Technology Solutions segment advanced 8 percent to $785 million, driven primarily by acquisitions completed in the prior year.

John Hammergren, CEO, said, "I am pleased with the excellent performance across all of our businesses for the first half of our fiscal year. Based on our performance to date and our expectations for the fiscal year, we are updating our previous outlook and now expect Adjusted Earnings per diluted share of $8.40 to $8.70 for the fiscal year ending March 31, 2014." Earlier, the company had expected earnings of $8.05 to $8.35 per share.

Analysts expect the company to report earnings of $8.33 per share for fiscal 2014.

Earlier in the day, McKesson said it plans to buy Celesio in a transaction valued at about $8.3 billion, including the assumption of Celesio's outstanding debt.

The deal is said to benefit McKesson in enhancing its share of the generic drug market globally. The operations of Celesio will be part of McKesson's Distribution Solutions segment.

MCK, which closed up 0.7 percent on Wednesday at $143.05, surged 8 percent in the pre-market to $154.50.