Those expenses cut into McKesson's third quarter profits, resulting in net income of $64 million for the period, down from $298 million a year earlier. But in a call with analysts, McKesson Chairman and CEO John Hammergren said he was pleased with both the results of the company's distribution solutions segment—where adjusted operating profit grew by 37%—and especially with last week's announcement of McKesson's acquisition of German rival Celesio.
In buying Celesio shares and convertible bonds, McKesson was able to secure more than the 75% ownership stake needed to purchase the company. Once that transaction closes Feb. 6, McKesson plans to launch a tender offer for the remaining outstanding shares and will begin to consolidate financial results during its fourth quarter. However, McKesson Executive VP and CFO James Beer told analysts during the call that the acquisition is not expected to have a “meaningful impact” on fourth quarter results.
With this latest release, McKesson updated its full fiscal year earnings guidance. The company expects adjusted earnings per diluted share will fall between $8.05 to $8.20. That's down from a previous estimate of $8.40 to $8.70 per share.