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McKesson fiscal 3Q profit falls on charge

Mon, 01/31/2011 - 12:45pm
The Associated Press

McKesson Corp. said Monday its adjusted quarterly profit fell on litigation-related expenses, but it raised its outlook for adjusted earnings for the fiscal year ending in March.

The medical supplies distributor said net income in the fiscal third quarter was $155 million, or 60 cents per share. Excluding a $189 million pretax charge for litigation on wholesale prices, the company said it would have earned $1.12 per share, including 10 cents per share in acquisition expenses.

Analysts expected $1.11 per share, according to FactSet.

A year ago, the company earned $326 million, or $1.19 per share.

Revenue was virtually flat at $28.25 billion, down about $25 million from a year ago and short of analysts' forecast of $28.33 billion.

McKesson said based on 9-month results, it is raising its estimate of earnings for the year ending March 31 to between $4.82 and $5.02 per share, excluding litigation reserves expenses related to the acquisition of US Oncology.

Analysts were expecting $4.83 per share for the year.

The litigation charge in the third quarter covered current and future claims against McKesson over drug-reimbursement benchmarks used in Medicaid, the government health program for low-income people. The company settled claims by private parties and said Monday it is in settlement talks with federal and state government agencies.

Before the report, McKesson shares rose $1.02 to $75.17 in regular trading. In after-hours trading, they rose 95 cents, or 1.3 percent, to $76.12.

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