McKesson ($MCK), the drug distribution giant, reported overall higher revenues in the first quarter, though its international sales were flat despite its acquisition of Celesio in 2014.
Revenues for the first quarter were $47.5 billion, a 9% gain from the $43.5 billion reported for the same period a year ago. Based on generally accepted accounting principles (GAAP), San Francisco-based McKesson said earnings per diluted share from continuing operations for the first quarter were $2.50 versus $1.76 a year ago.
International pharmaceutical distribution and services revenues were $5.8 billion for the quarter, down 17% on a reported basis and flat on a constant currency basis. Still, John Hammergren, president and CEO, said in a conference call with analysts that "operating performance from Celesio was ahead of our expectations in the quarter."
Additionally, the company said its Celesio unit acquired the pharmacy operations of Sainsbury's, a U.K. chain of supermarkets. Under terms of the deal, Celesio gets 277 in-store pharmacies and four hospital-based pharmacies.
"We're off to a positive start to the year and I'm encouraged by the momentum in our international Pharmaceutical Distribution and Services business," Hammergren told analysts.
McKesson bought Germany-based Celesio in late January 2014 for about $5.4 billion. That deal came about 10 days after a failed tender offer by McKesson for Celesio. The acquisition was expected to boost McKesson's profit and give it added strength in buying generic drugs for distribution. At the time of the deal, Bloomberg reported Celesio had 132 wholesale branches supplying 65,000 pharmacies and hospitals in 14 European countries.
- check out the earnings release
- read the analyst call transcript