) second quarter fiscal 2013 (ended September 30, 2012) adjusted
earnings of $1.92 per share surpassed the Zacks Consensus
Estimate of $1.76 per share. Also, the reported quarter's
adjusted earnings spiked 18% from the year-ago period. Earnings
benefited from a lower share count.
MCKESSON CORP (MCK): Free Stock Analysis
PSS WORLD MED (PSSI): Free Stock Analysis
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Revenues declined 1% to $29.9 billion. Revenues were short of the
Zacks Consensus Estimate of $30.9 billion.
Quarter in Detail
McKesson operates through two segments: Distribution Solutions
and Technology Solutions.
Revenues at the Distribution Solutions segment decreased 1% to
$29 billion in the reported quarter. The decline was attributable
to lower sales in the US pharmaceutical distribution unit.
Revenues from the US pharmaceutical distribution business came in
at $25.7 billion, down 1%. The decline was due to
brand-to-generic conversions and one less sales day.
Canadian revenue decreased 5% to $2.4 billion. The decrease was
attributable to unfavorable foreign exchange movements. Revenues
from Medical-Surgical distribution and services came in flat at
$873 million. Sales of the sub-group were impacted by fewer sales
days in the quarter.
Revenues at the Technology Solutions segment came in flat at $824
million. Operating expenses climbed 1.9% in the reported quarter
to $1.1 billion.
Fiscal 2013 Outlook
The company tweaked its adjusted earnings outlook for fiscal
2013. McKesson expects earnings (excluding special items) in the
range of $7.15-$7.35 per share (previous projection: $7.05 -
$7.35 share). The Zacks Consensus Estimate for fiscal 2013
currently stands at $7.26 per share.
McKesson to Buy PSS World
In a bid to expand its product portfolio, McKesson inked a deal
PSS World Medical, Inc.
) for $29.00 per share in cash. The total value of the deal, in
which McKesson will assume PSS World Medical's debt, is estimated
at approximately $2.1 billion. McKesson expects to generate more
than $100 million in annual savings (pre-tax) by the fourth year
after the closure of the deal.
Neutral on McKesson
We currently have a Neutral recommendation on McKesson. The stock
carries a Zacks #3 Rank (Hold rating) in the short run.