McKesson, a leading drug distributor, has reported a drop in profit for the latest quarter due to a significant charge associated with Rite Aid. However, the company has raised its outlook for the fiscal year.
In the fiscal third quarter that ended on December 31, McKesson recorded a net income of $589 million, or $4.42 per share. This is a decrease from the previous year’s net income of $1.08 billion, or $7.66 per share.
The drop in profit can be attributed to a pretax increase of $515 million in the provision for bad debts within the U.S. Pharmaceutical segment related to Rite Aid’s bankruptcy. On the other hand, McKesson also benefited from a pretax benefit of $126 million from the termination of the tax receivable agreement with Change Healthcare.
Excluding these one-time items, earnings per share stood at $7.74, surpassing analysts’ expectations of $7.04.
Additionally, McKesson’s revenue increased by 15% to reach $80.9 billion, exceeding analysts’ predictions of $77.93 billion.
Looking ahead, McKesson has raised its adjusted earnings per share guidance for the fiscal year ending in March. The company now forecasts a range of $27.25 to $27.65, compared to the previous range of $26.80 to $27.40.
Overall, despite the drop in profit from Rite Aid’s bankruptcy charge, McKesson remains optimistic and expects continued growth and success in the upcoming fiscal year.
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