McKesson recasts fiscal outlook to reflect lower pharma pricing

SAN FRANCISCO – McKesson on Thursday reported that revenues for the second quarter ended Sept. 30, 2016, totaled $50 billion, up 2% compared to the year-ago period. On the basis of U.S. generally accepted accounting principles, second-quarter earnings per diluted share from continuing operations was $1.35, compared to $2.65 a year ago.



The company is updating its outlook from the previous range of $13.43 to $13.93 per diluted share to a new range of $12.35 to $12.85 per diluted share for the fiscal year ending March 31, 2017.



“Our updated outlook for fiscal 2017 reflects McKesson’s expectation of a lower profit contribution resulting from recent customer pricing activities and lower operating profit as a result of further moderating branded pharmaceutical pricing trends compared to previous expectations,” stated John Hammergren, chairman and CEO. “While we work to actively respond to these market forces, we remain focused on our long-term strategy of innovation and value-added solutions. And though we responded quickly to maintain market share and mitigate these pricing challenges, we recognize the near-term impact requires a revision to our outlook.”



North America pharmaceutical distribution and services revenues of $41.4 billion for the quarter were up 2%, primarily reflecting market growth and acquisitions and partially offset by a previously disclosed customer loss in the prior year.



In other news, the board of directors of McKesson declared a regular dividend of 28 cents per share on common stock. The dividend will be payable on Jan. 2, 2017, to stockholders of record on Dec. 1, 2016.