CVS CVS Health Corporation

McKesson Corp. said a lower tax rate contributed to a 34% increase in profit for its December quarter.

The drug wholesaler said it has made progress in improving operating margins and realizing benefits from its 2014 purchase of a majority of Celesio AG.

Earlier this month, McKesson reduced its earnings guidance for the year ending in March and issued a downbeat outlook for 2017, pointing to weaker-than-expected pricing trends for generic pharmaceuticals. At the time, San Francisco-based McKesson said it was reviewing its administrative cost structure. The company reaffirmed its earnings guidance on Wednesday.

For the quarter ended Dec. 31, McKesson earned $634 million, or $2.73 a share, compared with $472 million, or $2 a share, a year earlier. Earnings excluding items were $3.18 a share.

Revenue rose 3% to $47.9 billion.

Analysts polled by Thomson Reuters projected earnings excluding items of $3.13 a share on revenue of $48.8 billion.

In September, McKesson agreed to buy certain Ireland and U.K. businesses from Dublin-based UDG Healthcare PLC for 407.5 million euros. The deal includes pharmaceutical distribution, home health-care and travel health-care operations.

Last week, Fitch Ratings affirmed McKesson's ratings but said the company's "competitive positioning will become somewhat weakened" after transactions involving big customers like Omnicare, which was sold to CVS Health Corp. last August.

Write to Josh Beckerman at josh.beckerman@wsj.com

(END) Dow Jones Newswires

January 27, 2016 17:25 ET (22:25 GMT)

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