McKesson Q3 revenues up 10% to $34.3 billion

SAN FRANCISCO — Days following the acquisition of a majority stake in Celesio, McKesson Corp. on Thursday reported that revenues for the third quarter ended Dec. 31 totaled $34.3 billion, up 10% compared with a year ago.  

Third-quarter adjusted earnings per diluted share from continuing operations was $1.45 compared to $1.44 a year ago.  

“We are extremely pleased by the third-quarter performance of our Distribution Solutions segment where adjusted operating profit grew by 37% and our full-year view of the performance in Distribution Solutions is better than our previous expectations,” John Hammergren, chairman and CEO, said. “This operating strength is offset by an increase in our tax reserves due to a dispute with the Canadian tax authorities and a charge in our Technology Solutions segment as we continue to align our Horizon Clinicals software platform development efforts and size the organization appropriately given regulatory delays. As a result, we are updating our previous outlook and now expect Adjusted Earnings per diluted share of $8.05 to $8.20 for the fiscal year ending March 31, 2014.”

Distribution Solutions revenues were up 10% in the third quarter, driven mainly by strong growth in U.S. pharmaceutical direct distribution and services revenues due to market growth and the wholesaler's mix of business. This area represents a significant growth driver for the wholesaler following its deals to acquire a majority stake in Celesio. "The combination of McKesson and Celesio is expected to have revenues in excess of $150 billion, approximately 81,000 employees worldwide and operations in more than 20 countries," Hammergren told analysts Thursday evening. "We will deliver to approximately 120,000 pharmacy and hospital locations on a daily basis in the U.S., Canada, Europe and Brazil, including more than 11,000 pharmacies that are either owned or part of a strategic banner or franchise network of community pharmacies."

Canadian revenues, on a constant currency basis, increased 12% for the third quarter primarily due to market growth and new customer wins. Including an unfavorable currency impact of 6%, Canadian revenues increased 6% for the third quarter. 

Medical-Surgical distribution and services revenues were up 67% for the third quarter driven primarily by the acquisition of PSS World Medical and market growth. 

Technology Solutions revenues were up 6% in the third quarter compared to the prior year driven primarily by acquisitions completed in the prior year.