OREANDA-NEWS. August 07, 2014. McKesson Corporation (NYSE:MCK) reported that revenues for the first quarter ended June 30, 2014 were USD 44.1 billion, up 37% compared to USD 32.2 billion a year ago. 

On the basis of U.S. generally accepted accounting principles (“GAAP”), first-quarter earnings per diluted share from continuing operations was USD 1.78 compared to USD 1.84 a year ago. 

First-quarter Adjusted Earnings per diluted share from continuing operations was USD 2.49, up 18% compared to USD 2.11 a year ago.   

First-quarter GAAP and Adjusted Earnings reflect a pre-tax charge of USD 34 million, or 11 cents per diluted share, related to the reclassification of a portion of our International Technology business, previously reported in discontinued operations, to continuing operations.

“McKesson fiscal first quarter results represent a strong start to the year with solid execution across our business and particularly strong growth in our Distribution Solutions segment,” said John H. Hammergren, chairman and chief executive officer.  “Based on the strength of our Distribution Solutions results in the first quarter and our confidence in the full year, we are raising our previous outlook and now expect Adjusted Earnings per diluted share from continuing operations of USD 10.50 to USD 10.90 for the fiscal year ending March 31, 2015.”

For the first quarter, McKesson generated cash from operations of USD 182 million, and ended the quarter with cash and cash equivalents of USD 4.1 billion.  During the quarter, McKesson paid USD 59 million in dividends, had internal capital spending of USD 119 million, and spent USD 14 million on acquisitions.

Segment Results

Distribution Solutions revenues were USD 43.3 billion, up 38% for the quarter on a constant currency basis, 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 15% for the quarter on a constant currency basis, primarily reflecting market growth and our mix of business.

International pharmaceutical distribution and services revenues were USD 7.6 billion, an increase of 3% on the underlying results of Celesio, as reported, on a constant currency basis.

Medical-Surgical distribution and services revenues were up 2% for the quarter, driven by market growth. 

In the first quarter, Distribution Solutions GAAP operating profit was USD 748 million and GAAP operating margin was 1.73%.  First-quarter adjusted operating profit was USD 1 billion, up 44% from the prior year, driven by the acquisition of Celesio and strong results in our North America pharmaceutical distribution and services business.  Adjusted operating margin for the Distribution Solutions segment was 2.32%.

Technology Solutions revenues were down 8% in the first quarter 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 68 million for the first quarter and GAAP operating margin was 8.85%.  Adjusted operating profit was USD 80 million for the first quarter and adjusted operating margin was 10.42%.  Technology Solutions first quarter results reflect the reclassification of a portion of our International Technology business from discontinued operations to continuing operations, including an associated pre-tax charge of USD 34 million, or 11 cents per diluted share.