McKesson Q1 revenues up 9%

SAN FRANCISCO — McKesson on Thursday reported increased revenues for the first quarter, which ended June 30. At $47.5 billion, revenues were up 9%, compared with $43.5 billion a year ago. First-quarter earnings per diluted share from continuing operations was $2.50 compared with $1.76 a year ago.

“McKesson’s first-quarter results represent a good start to the fiscal year driven by solid execution across both segments,” John Hammergren, McKesson chairman and CEO, said. “We are updating our outlook to reflect the gain on the sale of our nurse triage business, and now expect adjusted earnings per diluted share of $12.36 to $12.86 for the fiscal year ending March 31, 2016.”

Distribution Solutions revenues were $46.8 billion for the quarter, up 10% on a reported basis and 13% on a constant currency basis.

As for North America pharmaceutical distribution and services, revenues were up 15% on a reported basis and 16% on a constant-currency basis. International pharmaceutical distribution and services revenues, on the other hand, were $5.8 billion for the quarter, down 17% on a reported basis and flat on a constant-currency basis.

In the first quarter, McKesson generated cash from operations of $454 million, and ended the quarter with cash and cash equivalents of $5.6 billion, the company said.

The board of directors on Wednesday also approved an increase to the quarterly dividend from 24 cents to 28 cents per share. 

The Celesio Group, of which McKesson is the majority shareholder, also reaffirmed its plans to acquire Sainsbury’s U.K.-based pharmacy operations during the quarterly earnings announcement.

Through the acquisition, the LloydsPharmacy brand in the United Kingdom will gain 281 new pharmacies, complementing more than 12,000 owned or banner pharmacies across McKesson, according to the company.

“We have a strong track record of creating value for our shareholders with our portfolio approach to capital deployment through a mixture of internal investments, acquisitions, share repurchases and dividends,” Hammergren said. “The acquisition of Sainsbury’s pharmacies and dividend increase further demonstrate our commitment to this approach and our commitment to long-term shareholder value creation.”

Looking ahead, McKesson expects adjusted earnings per diluted share between $12.36 and $12.86 for the fiscal year ending March 31, 2016, based on an exchange rate of $1.10 per Euro.

Click here for the full financial results.