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McKesson Profit Climbs 58% on Higher Drug, Service Sales

October 22, 2002|From Bloomberg News

SAN FRANCISCO — McKesson Corp.'s quarterly profit climbed 58% as the No. 3 U.S. drug wholesaler sold more medicines, health-care supplies and services.

Net income for the fiscal second quarter ended Sept. 30 rose to $124.8 million, or 42 cents a share, from $79 million, or 27 cents, a year earlier.

Revenue excluding shipments to customers' warehouses, a benchmark for drug wholesalers, rose 15% to $10.3 billion from $8.91 billion, McKesson said in a statement.

Pharmaceutical sales rose 17% to $9.32 billion as McKesson sold more generic medicines, which have higher profit margins. Revenue from computer services and software rose 16% to $275.5 million, continuing the revival of a business McKesson bought for $13.9 billion in 1999 that cost the company billions in market value when sales turned out to be inflated.

"I'm impressed with the computer services" results, said Ralph Shive, who holds 25,000 McKesson shares in his 1st Source Monogram Income Equity Fund. "That had been a huge drain for them, and it's as good news as any in this quarter."

Sales of medical and surgical supplies were unchanged at $684.2 million. The company in June had said revenue in that business would be little changed in fiscal 2003 as the unit is reorganized.

Shares of San Francisco-based McKesson rose 73 cents to $29.24 in New York Stock Exchange trading. The company reported results after U.S. markets closed.

McKesson trails AmerisourceBergen Corp. and Cardinal Health Inc. in pharmaceutical-distribution sales.

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