McKesson income rises 32% in Q2

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McKesson has reported positive financial results for the 2008 second quarter, which ended Sept. 30.
The company reported that its profits were $26.6 billion, compared to $24.5 billion a year ago. The second quarter results included $.27 per diluted share from a tax reserve release of $76 million and $.05 per diluted share from the disposition of its 42 percent equity interest in Verispan, while the prior year earnings were positively impacted by $.01 per diluted share, as a result of various settlements of its Securities Litigation, according to the company.

McKesson also posted a positive net income with $327 million for the 2008 second year, compared $247 million for the year-ago results—a 32 percent increase.

“We had a solid quarter, with a particularly strong performance from Distribution Solutions despite industry concerns about lower prescription trends,” said John H. Hammergren, chairman and CEO. “In Technology Solutions, our second quarter operating profit was up 8 percent year-over-year, although we did begin to see some customers delay their purchasing decisions.”

In the second quarter, McKesson said its revenues increased by 9 percent, driven primarily by continued growth across all businesses in Distribution Solutions. Earnings per diluted share was up 41 percent versus the prior year, driven by the positive impact of the tax reserve release, solid results in Distribution Solutions, which included the gain on the sale of Verispan, and the benefit from the impact of share repurchases made in fiscal 2008 and the first half of fiscal 2009.

The company said its U.S. pharmaceutical direct distribution and services revenues grew 16 percent for the quarter, reflecting market growth rates, the acquisitions of Oncology Therapeutics Network and McQueary Brothers and expanded business with existing customers. However, they noted that warehouse sales were down 7 percent in the quarter, primarily due to a decrease in purchases from a large customer beginning in January and the additional impact of decreased purchases from several other existing customers.