OREANDA-NEWS. McKesson Corporation (NYSE:MCK) today reported that revenues for the second quarter ended September 30, 2014 were USD 44.8 billion, up 36% compared to USD 33 billion a year ago. On the basis of U.S. generally accepted accounting principles ("GAAP"), second-quarter earnings per diluted share from continuing operations was USD 2.05 compared to USD 1.82 a year ago.

Second-quarter Adjusted Earnings per diluted share from continuing operations was USD 2.79, up 21% compared to USD 2.30 a year ago.

"McKesson delivered another quarter of solid results reflecting strong execution across our business. We are very pleased with our performance for the first half of Fiscal 2015," said John H. Hammergren, chairman and chief executive officer. "We continue to expect Adjusted Earnings per diluted share from continuing operations of USD 10.50 to USD 10.90 for the fiscal year ending March 31, 2015."

For the first half of the fiscal year, McKesson generated cash from operations of USD 165 million, and ended the quarter with cash and cash equivalents of USD 3.8 billion. During the first half of the fiscal year, McKesson paid USD 115 million in dividends, had internal capital spending of USD 272 million, and spent USD 31 million on acquisitions.

Segment Results

Distribution Solutions revenues were USD 44 billion, up 37% for the quarter on a reported and constant currency basis, mainly driven by the contribution from our acquisition of Celesio and market growth.

North America pharmaceutical distribution and services revenues, which include results from U.S. Pharmaceutical, McKesson Canada and McKesson Specialty Health, were up 14% as reported and 15% on a constant currency basis for the quarter, reflecting continued demand for two recently launched drugs for the treatment of Hepatitis C, market growth and our mix of business.

International pharmaceutical distribution and services revenues were USD 7.3 billion, an increase of 4% on the underlying results of Celesio on a constant currency basis.

Medical-Surgical distribution and services revenues were up 4% for the quarter, driven by market growth.

In the second quarter, Distribution Solutions GAAP operating profit was USD 793 million and GAAP operating margin was 1.80%. Second-quarter adjusted operating profit was USD 1,063 million and the adjusted operating margin was 2.42%.

Technology Solutions revenues were USD 770 million, down 6% in the second quarter compared to the prior year, driven by anticipated revenue softness from the Horizon clinical software platform and the planned elimination of a product line, partially offset by growth in other technology businesses. GAAP operating profit was USD 125 million for the second quarter and GAAP operating margin was 16.23%. Adjusted operating profit was USD 139 million for the second quarter and adjusted operating margin was 18.05%.

Fiscal Year 2015 Outlook

McKesson expects Adjusted Earnings per diluted share from continuing operations between USD 10.50 and USD 10.90 for the fiscal year ending March 31, 2015, based on an updated exchange rate of USD 1.31 per Euro, which excludes the following GAAP items:

Amortization of acquisition-related intangible assets of USD 1.32 per diluted share.

Acquisition expenses and related adjustments of 57 cents per diluted share.

LIFO inventory-related charges of 97 cents to USD 1.07 per diluted share.

Adjusted Earnings

McKesson separately reports financial results on the basis of Adjusted Earnings. Adjusted Earnings is a non-GAAP financial measure defined as GAAP income from continuing operations, excluding amortization of acquisition-related intangible assets, acquisition expenses and related adjustments, certain litigation reserve adjustments, and Last-In-First-Out ("LIFO") inventory-related adjustments. A reconciliation of McKesson's financial results determined in accordance with GAAP to Adjusted Earnings is provided in Schedules 2, 3 and 4 of the financial statement tables included with this release.