earnings fell 5% in its fiscal first quarter, despite double-digit growth in its distribution segment, as charges related to its international technology business and certain one-time items dragged down the company's bottom line.
The San Francisco-based pharmaceutical
distributor and information technology
company reported net income of $403 million for the period ended June 30, 2014, down from $424 million a year earlier. First-quarter earnings per diluted share from continuing operations were $1.78, down from $1.84 in the first fiscal quarter of 2014.
But revenue surged 37% for the quarter to $44.1 billion, up from $32.2 billion in the year-ago period, fueled by growth in market share and the acquisition of German rival Celesio
. Meanwhile, revenue from the company’s medical-surgical distribution and services segment rose only 2%.
“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,” CEO John Hammergren said in a release
As a result, the company raised its earnings guidance for the full year, with Hammergren announcing expected adjusted earnings per diluted share from continuing operations of $10.50 to $10.90 for the year ending March 31, 2015.
But a lawsuit filed in May by Magnetar Financial could threaten McKesson’s full-year results. The hedge fund alleged that McKesson offered a higher price to Celesio shareholder Elliott Management Corp. in its February takeover of the German company. If the lawsuit is successful, McKesson could be forced to pay additional money to former Celesio shareholders and bondholders who tendered their holdings in the deal for 23.5 euros per share.Follow Rachel Landen on Twitter: @MHrlanden