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McKesson reports fiscal 2010 third-quarter results |
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McKesson Corporation has reported revenues for the third quarter ended December 31, 2009 to be $28.3 billion compared to $27.1 billion a year ago. Earnings per diluted share was $1.19 compared to a loss of seven cents per diluted share a year ago. Last year's results included the impact of a pre-tax charge of $493 million, or $1.12 per diluted share, for the Average Wholesale Price (AWP) litigation. The company said distribution solutions revenues were up 4%, and US pharmaceutical distribution revenues were up 2% for the quarter, mainly reflecting market growth, which was partially offset by the loss of certain customers in late fiscal 2009. It said it is witnessing a shift of revenues to direct store delivery from sales to customers' warehouses. Distribution solutions gross profit was $1,104 million compared to $988 million in the third quarter a year ago, higher mainly due to the impact of the H1N1 flu virus, which helped drive an improved mix of higher margin revenues stemming from increased flu-related demand across our distribution businesses. Gross profit margin also benefited from higher profit from the sale of generic drugs, through these were partially offset by lower sell margin in the company's US pharmaceutical business and the timing of compensation from branded pharmaceutical manufacturers. Distribution solutions operating profit of $558 million was up 27% as compared to operating profit before the AWP litigation charge of $493 million in the same period a year ago. In the third quarter, operating margin of 2.03% benefited from the higher gross profit margin and a $17 million pre-tax gain from the sale of our 50% equity interest in McKesson Logistics Solutions LLC, a Canadian logistics company. In Technology Solutions, revenues were up 3% for the quarter. Services revenues grew 6% reflecting the steady nature of our offering. Software revenues were down 2% and hardware revenues were down 32%. Technology Solutions operating profit in the third quarter was $81 million, down 11% from $91 million a year ago. The operating margin was 10.51% compared to 12.12% in the same period a year ago, primarily reflecting a decrease in gross profit margin due to a higher software deferral rate and additional amortization related to McKesson's Horizon Enterprise Revenue Management solution, which became generally available in the second quarter of this fiscal year. John H Hammergren, chairman and CEO said McKesson's results were driven by our performance in Distribution Solutions, including a strong contribution from the incremental demand experienced across businesses from the impact of the flu season. He said, “In particular, I am proud of the tremendous effort across McKesson to safely and efficiently deliver over 100 million doses of H1N1 flu vaccine and ancillary medical supplies in partnership with the Centers for Disease Control and Prevention.” |
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