OREANDA-NEWS. McKesson Corporation (NYSE:MCK) today reported that revenues for the third quarter ended December 31, 2014 were USD 47.0 billion, up 37% compared to USD 34.3 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 2.01 compared to USD 0.70 a year ago.

"I am pleased by the strong performance of our business for the first nine months of our fiscal year. We have raised our outlook for the year and now expect Adjusted Earnings per diluted share from continuing operations of USD 10.80 to USD 10.95 for the fiscal year ending March 31, 2015. McKesson's third-quarter results reflect solid execution across our business," said John H. Hammergren, chairman and chief executive officer.

Third-quarter Adjusted Earnings per diluted share was USD 2.89, up 95% compared to USD 1.48 a year ago. Third-quarter results benefitted from the pull forward of earnings generated by our branded portfolio of products previously anticipated in the fourth quarter and a lower than expected tax rate driven by the enactment of recent legislation.

For the first nine months of the fiscal year, McKesson generated cash from operations of USD 1.2 billion, and ended the quarter with cash and cash equivalents of USD 4.6 billion. Through nine months of the fiscal year, McKesson paid USD 171 million in dividends, had internal capital spending of USD 405 million, and spent USD 40 million on acquisitions.

Segment Results

Distribution Solutions revenues were USD 46.3 billion, up 38% on a reported basis and 39% on a constant currency basis for the quarter, 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 17% on a reported and constant currency basis for the quarter, reflecting market growth including growth from existing customers and continued demand for recently launched drugs for the treatment of Hepatitis C.

International pharmaceutical distribution and services revenues were USD 7.3 billion, an increase of 7% on the underlying results of Celesio on a constant currency basis.

Medical-Surgical distribution and services revenues were up 7% for the quarter, driven by market growth.

In the third quarter, Distribution Solutions GAAP operating profit was USD 785 million and GAAP operating margin was 1.70%. Third-quarter adjusted operating profit was USD 1,043 million and the adjusted operating margin was 2.26%.

Technology Solutions revenues were USD 755 million, down 7% in the third 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 111 million for the third quarter and GAAP operating margin was 14.70%. Adjusted operating profit was USD 123 million for the third quarter and adjusted operating margin was 16.29%.

Fiscal Year 2015 Outlook

McKesson expects Adjusted Earnings per diluted share from continuing operations between USD 10.80 and USD 10.95 for the fiscal year ending March 31, 2015, based on an updated full year average exchange rate of USD 1.29 per Euro, which excludes the following GAAP items:

Amortization of acquisition-related intangible assets of USD 1.48 per diluted share.

Acquisition expenses and related adjustments of 63 cents per diluted share.

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