McKesson Shares Slide as Outlook Slashed
October 27 2016 - 6:20PM
Dow Jones News
Shares of health-care giant McKesson Corp. slid in after-hours
trading Thursday after the company sharply cut its profit outlook
for the year as income dropped by half in its latest quarter.
The company said the latest results were affected by a "softer
pricing environment" in its U.S. pharmaceutical business. Expenses
also rose during the quarter.
The company also unveiled a $4 billion share-repurchase
authorization.
McKesson said it now expects the year's adjusted earnings on a
per-share basis to be $12.35 to $12.85, down from $13.43 to
$13.93.
Shares dropped 11.5% to $142.1 after hours.
For the quarter ended Sept. 30, net income was $307 million, or
$1.34 a share, compared with $617 million, or $2.63 a share, a year
earlier. Adjusted earnings rose to $2.94 a share from $3.17. The
latest quarter's results include a pretax goodwill impairment
charge of $290 million, or $1.24 per share.
Revenue rose 2.5% to $49.96 billion.
Analysts polled by Thomson Reuters expected adjusted earnings of
$3.05 a share on $51.21 billion.
Total operating expenses climbed 15% to $2.17 billion.
In June, the company said it plans to form a health-care
information-technology joint venture that it expected to take
public later in an initial public offering. The planned company
will combine most of McKesson's technology segment with the bulk of
Change Healthcare Holdings Inc., which is majority-wned by
Blackstone Group LP. McKesson would own 70% of the new company,
with the rest owned by Change Healthcare's shareholders, including
Blackstone and Hellman & Friedman LLC.
Over the past year, the company has made job cuts and
acquisitions as it contends with revamped customer relationships
due to consolidation.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
(END) Dow Jones Newswires
October 27, 2016 18:05 ET (22:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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