McKesson Corp. (MCK) Monday reported a 23 percent increase in fourth-quarter profit, as the drug wholesaler's revenues grew more-than-anticipated led by its core distribution solutions business.
The company's distribution solutions business, which represents majority of its topline, advanced 10 percent to $30.84 billion from last year, reflecting new business with existing customers and market growth.
Chief Executive John Hammergren said, "Distribution Solutions had another excellent year with strong performance across the segment. Our U.S. pharmaceutical distribution business, in particular, continues to leverage its scale and comprehensive value proposition to deliver un-matched solutions to our customers..."
On April 11, McKesson said VA selected the company to continue as the prime pharmaceutical supplier. The two-year agreement calls for McKesson to supply all of the VA's medical centers and outpatient clinics.
Revenues at the smaller technology solutions unit declined 2 percent to $860 million from last year.
San Francisco-based McKesson said revenues for the fourth quarter grew 10 percent to $31.70 billion from $28.85 billion a year ago. Twelve analysts on a consensus estimated revenues of $30.40 billion for the quarter.
For the fourth quarter, McKesson's net income improved to $521 million or $2.09 per share from $422 million or $1.62 last year.
On an adjusted basis, earnings were $2.09 per share compared to $1.78 per share a year ago.
On average, 15 analysts polled by Thomson Reuters expected earnings of $2.06 per share for the quarter. Analysts' estimates typically exclude special items.
Looking forward to the fiscal year ending March 2013, McKesson expects adjusted earnings in a range of $7.05 to $7.35 per share, while analysts currently expect earnings of $7.19 per share.
MCK closed Monday's trading at $91.41, up $0.36 or 0.40%, on a volume of 2.4 million shares on the NYSE. In after-hours, the stock lost $2.28 or 2.49%.
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