Fourth-quarter and full-year earnings soared at healthcare giant McKesson Corp., mostly due to the absence of previous acquisition-related charges.
McKesson reported profits of $431 million during the quarter ended March 31. That's more than triple what the company reported during the same period the year before. Last year, the company recorded $267 million in charges related to the sale of its Brazilian pharmaceutical business, but this year, it only recorded $21 million.
Adjusted earnings, which exclude acquisition-related expenses, were $452 million, net of tax, up just 13% from the same period the year before.
Fiscal 2016 profit was $2.26 billion, up 53% from the year before. Full-year profits were affected by about $229 million in pretax charges related to McKesson's cost-cutting activities. McKesson laid off roughly 4% of its workforce earlier this year.
Adjusted full-year profit, which includes the restructuring charges, was $2.29 billion, up 29% from the year before. Annual revenue was $190.9 billion, up 7% from the year before.
Full-year results include a $52 million gain from McKesson's sale of Zee Medical, a workplace-safety product manufacturer.
McKesson reported positive results in its distribution business but anticipated a decline in its technology business.
Distribution revenue was $45.9 billion for the quarter, up 4%, thanks to market growth in North America and international pharmaceutical distribution markets. That was slightly offset by unfavorable foreign currency exchange rates. Medical-surgical distribution sales were a modest factor in the gains, but were offset by the sale of Zee Medical. Full-year distribution revenues were $188 billion, up 7%.
Technology revenue was $734 million in the fourth quarter, down 5%, impacted by an expected decline in the company's hospital software business and the sale of its nurse triage hotline business. The segment reported $2.9 billion in revenue for the year, down 6%.
The company expects 2017 earnings per diluted share of $13.30 to $13.80, excluding about 12 cents to 15 cents in charges related to its cost-cutting plan.
Though the company has previously spoken out about price hikes for generic drugs, CEO John Hammergren maintained that represents a small subset of generics that will have a nominal effect on the company's finances. The company's generic pharmaceutical portfolio continues to see significant deflation, he said.