McKesson Misses Profit Expectations But Raises Outlook And Boosts Dividend

By Tomi Kilgore Markets MarketWatch Pulse

McKesson Corp. reported Thursday a fiscal first-quarter net profit of $309 million, or $1.45 a share, down from $542 million, or $2.38 a share, in the same period a year ago. Excluding non-recurring items, adjusted earnings per share came to $2.46, below the FactSet consensus of $2.83. The health care supply company said revenue rose to $51.05 billion from $49.73 billion but was below the FactSet consensus of $51.23 billion. "First-quarter results included the lapping effect of the lower profit contribution from increased price competition in our independent pharmacy business in Fiscal 2017 and weaker pharmaceutical manufacturer pricing trends in our U.S. Pharmaceutical business within our Distribution Solutions segment, and lower profit in our Technology Solutions segment driven primarily by the contribution of the majority of the businesses to Change Healthcare," the company said in a statement. McKesson raises its fiscal 2018 adjusted EPS outlook to $11.80 to $12.50 from $11.75 to $12.45. Separately, the company raised its quarterly dividend by 21% to 34 cents a share from 28 cents a share. The stock, which was still inactive in premarket trade, has run up 18.4% year to date, while the SPDR Health Care Select Sector ETF has climbed 16.2% and the S&P 500 has gained 10.7%.

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