U.S. drug distributor McKesson Corp. (MCK) on Wednesday reported a 50 percent decline in profit for the fourth quarter, reflecting one-time charges and lower revenues. Both revenue and adjusted earnings per share missed analysts' estimates. Looking ahead, the company forecast fiscal 2014 earnings in line with analysts' expectations.
John Hammergren, chairman and chief executive officer of McKesson said, "We took important strategic and operational actions during the quarter and while these actions impacted our fourth quarter financial results, I believe they leave the Company well positioned for continued success going forward."
The San Francisco, California-based company's fourth-quarter net income was $259 million or $1.10 per share, down from $521 million or $2.09 per share in the year-ago quarter.
The company committed to a plan to sell its 49 percent equity investment in Nadro S.A. de C.V., a privately-held pharmaceutical distributor in Mexico, which resulted in a non-cash, pre-tax impairment charge of $191 million in the quarter.
Adjusted net income was $343 million or $1.45 per share, compared to $520 million or $2.09 per share in the previous-year quarter. On average, fourteen analysts polled by Thomson Reuters expected the company to earn $2.30 per share. Analysts' estimate typically exclude special items.
The latest quarter's reported and adjusted earnings per share include $0.76 in impairment charges and $0.11 in severance and facility exit costs.
Revenues for the fourth quarter declined 3 percent to $30.62 billion from $31.70 billion in the same period last year. Analysts had a consensus revenue estimate of $32.01 billion.
Total operating expenses rose 19 percent to $1.36 billion.
For fiscal 2013, McKesson's net income declined to $1.34 billion from $1.40 billion in the prior year. However, earnings per share were flat with the prior-year period at $5.59. Adjusted net income for the year was $1.52 billion or $6.33 per share, compared to $1.60 billion or $6.38 per share in the previous year.
Revenue for the year edged down to $122.46 billion from $122.73 billion in the previous year.
Analysts expected the company to earn $7.21 per share for the year on revenues of $123.72 billion.
Looking ahead to fiscal 2014, McKesson forecasts adjusted earnings per share from continuing operations between $7.90 and $8.20. Analysts currently expect the company to earn $8.06 per share for the year.
MCK closed Tuesday's regular trading session at $108.63, up $0.40 or 0.37 percent on a volume of 1.21 million shares. In after-hours, the stock further gained $1.67 or 1.54 percent to $110.30.
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