OREANDA-NEWS. February 05, 2014. McKesson Corporation (NYSE:MCK) reported that revenues for the third quarter ended December 31, 2013 were USD 34.3 billion, up 10% compared to USD 31.1 billion a year ago.

On the basis of U.S. generally accepted accounting principles (“GAAP”), third-quarter earnings per diluted share from continuing operations was USD 0.67 compared to USD 1.27 a year ago. Third-quarter GAAP earnings per diluted share from continuing operations includes charges of USD 142 million, or 37 cents per share, related to LIFO adjustments, USD 122 million, or 52 cents per share, related to an ongoing dispute with the Canada Revenue Agency and USD 42 million, or 18 cents per share, in the Technology Solutions segment from restructuring actions in the Horizon Clinicals software platform.   Third-quarter GAAP earnings per diluted share was USD 0.28 which includes a 39 cent loss from discontinued operations.

Third-quarter Adjusted Earnings per diluted share from continuing operations was USD 1.45 compared to USD 1.44 a year ago. Third-quarter Adjusted Earnings per share includes charges of \\$ USD 122 million, or 52 cents per share, related to the Canadian dispute and USD 42 million, or 18 cents per share, in the Technology Solutions segment.

“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,” said John H. Hammergren, chairman and chief executive officer.  “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 USD 8.05 to \\$8.20 for the fiscal year ending March 31, 2014.”

For the first nine months of the fiscal year, McKesson generated cash from operations of USD 472 million, and ended the quarter with cash and cash equivalents of USD 2.4 billion. During the first nine months of the fiscal year, McKesson paid USD 154 million in dividends, had internal capital spending of USD 296 million, and spent USD 116 million on acquisitions.

Segment Results
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 our mix of business.

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. 

In the third quarter, Distribution Solutions GAAP operating profit was USD 552 million and GAAP operating margin was 1.65%. Third-quarter adjusted operating profit was USD 783 million and the adjusted operating margin was 2.34%.

Technology Solutions revenues were up 6% in the third quarter compared to the prior year driven primarily by acquisitions completed in the prior year.  GAAP operating profit was USD 37 million for the third quarter and GAAP operating margin was 4.72%. Adjusted operating profit was \\$67 million for the third quarter and adjusted operating margin was 8.55%. Technology Solutions third-quarter segment results include a charge of USD 42 million driven by restructuring actions in the Horizon Clinicals software platform.