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McKesson reports strong Q4, fiscal year 2012


SAN FRANCISCO — McKesson reported strong fourth-quarter and full-year results, thanks to gains across several of the company's business segments.

Revenues for the fourth quarter ended March 31 were up 10% to $31.7 billion, compared with the year-ago period, while earnings per diluted share were $2.09, up from $1.62 in the same period last year. For fiscal year 2012, McKesson had revenues of $122.7 billion, up nearly 9.5% from fiscal year 2011. Full-year earnings per diluted share from continuing operations totaled $5.59, up 30% from the prior year.

Adjusted earnings per diluted share were $2.09 in the fourth quarter (up 17% compared with $1.78 a year ago), while full-year adjusted earnings per diluted share was $6.38 (up 20% compared with $5.31 in the prior year).

McKesson said its fourth-quarter and full-year gains were attributed to several factors, including the purchase of Katz Group, which was the company's largest international acquisition to date. Canadian revenues were up 13% for the fourth quarter (including the unfavorable currency impact of 1%, Canadian revenues increased 12% for the quarter), while for the full year, Canadian revenues grew 3% on a constant currency basis. Including the favorable currency impact of 2%, Canadian revenues grew 5% for the full year.

"Our strong balance sheet and cash flow continue to provide us with opportunities to deploy capital to create value for our shareholders," Hammergren said. "Our acquisition of the Katz Group assets in our fiscal fourth quarter represents our largest international acquisition to date. The acquisition leverages the existing scale of our Canadian banner business and demonstrates our ongoing commitment to the health of the independent pharmacy. In addition, our continued strong cash flow allowed us to execute another accelerated share repurchase program in the fourth quarter. We plan to continue our portfolio approach to capital deployment with a mix of acquisitions, share repurchases, dividends, and internal investments."

Additional highlights included:

  • Distribution Solutions revenues were up 10% for the fourth quarter and 10% for the full year. U.S. pharmaceutical distribution revenues were up 10% for the fourth quarter, primarily reflecting new business with existing customers and market growth. For the full year, U.S. pharmaceutical distribution revenues also increased 10%, primarily reflecting market growth and the US Oncology acquisition;

  • Medical-Surgical distribution and services revenues were up 8% for the fourth quarter and 8% for the full year, primarily driven by market growth and new customers; and

  • Although Technology Solutions revenues were down 2% for the fourth quarter, revenues were up 4% for the full year. "I am pleased to see our Technology Solutions businesses working closely with our customers as they prepare for the requirements of Meaningful Use in the evolving landscape of healthcare IT regulation. We are committed to helping customers use IT strategically to enable better business, better care and better connectivity," Hammergren said.

Looking ahead, Hammergren said McKesson expects adjusted earnings per diluted share will be between $7.05 and $7.35 for fiscal year 2013.

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