Profits Plunge at McKesson, Bergen

McKesson HBOC Inc. and Bergen Brunswig Corp., two of the largest U.S. drug wholesalers, said Wednesday that quarterly earnings fell more than 50% on slowing sales at recently acquired units. The results, poorer than analysts expected, sent shares of both companies lower.

San Francisco-based McKesson said fiscal fourth-quarter profit from continuing operations fell 52% to $61.4 million, or 22 cents a share, from $127.1 million, or 45 cents, a year earlier. Orange-based Bergen said its fiscal second-quarter net income fell 55% to $17.3 million, or 13 cents a share, from $38.4 million, or 35 cents, a year ago.

Both companies, concerned about slowing growth in their distribution operations, made purchases to gain new lines of business. McKesson’s HBO health-care software and services unit had a sales drop of 29%. Bergen’s Stadtlander specialty drug distribution unit lost $2.3 million before interest, taxes, depreciation and amortization.

The results are a continuation of problems for the companies, whose shares are trading at or near 52-week lows.

In New York Stock Exchange trading, McKesson shares fell $1.94 to close at $17, a five-year low, while Bergen shares fell 19 cents to close at $5.25.

McKesson was expected to earn 29 cents a share, the average estimate of analysts polled by First Call/Thomson Financial. Sales rose to $9.31 billion, from $8.31 billion.

Bergen Brunswig was expected to earn 14 cents. Sales rose 14% to $4.89 billion, from $4.3 billion.

At a Glance

Other earnings, excluding one-time gains and charges unless noted:

* Carlsbad-based golf club maker Callaway Golf Co. posted better-than-expected earnings for its first quarter. Net income rose 26% to $16.2 million, or 22 cents per share, from $12.8 million, or 13 cents, a year earlier. Wall Street analysts had expected earnings of 13 cents. Sales rose 11% to $206.6 million from $185.7 million.

* Oakland-based Dreyer’s Grand Ice Cream Inc. reported first-quarter net income of $2.6 million, or 8 cents per share, contrasted with a net loss of $3.9 million, or 15 cents, a year ago. Revenue rose to $241.7 million from $228.5 million.

* FirstFed Financial Corp., the Santa Monica-based parent of First Federal Bank of California, reported first-quarter net income of $8.8 million, or 49 cents per share, compared with $8.9 million, or 43 cents, a year ago. The results beat analysts’ expectations of 48 cents. Net interest income rose to $25.9 million from $25.2 million.

* Garden Fresh Restaurant Corp., the San Diego-based operator of Souplantation restaurants, reported fiscal second-quarter net income of $1.87 million, or 32 cents per share, compared with $1.84 million, or 32 cents, a year ago. Sales rose to $40.8 million from $32.9 million.

* La Jolla-based Jenny Craig Inc. reported fiscal third-quarter operating income of $2.6 million, or 8 cents per share, compared with operating income of $1.4 million, or 5 cents, a year ago. Revenue fell to $80.8 million from $84.5 million.

The weight-loss company also said it has been advised that it doesn’t meet the New York Stock Exchange’s continued listing standards for market capitalization and stockholders’ equity. NYSE standards call for each to be $50 million or more. Shares have fallen about 50% this year.

* K2 Inc., a Los Angeles-based sporting goods maker, reported first-quarter income from continuing operations rose to $3.3 million, or 18 cents per share, compared with $3.1 million, or 19 cents a year ago. Sales rose to $181.8 million from $163.1 million.

* Power-One Inc., a Camarillo-based maker of power supplies for electronics manufacturers, reported a first-quarter net loss, including acquisition charges, of $1.5 million, or 6 cents per share, compared with a loss of $3.5 million, or 19 cents, a year ago. Sales rose 98% to $77.0 million.

* Woodland Hills-based 21st Century Insurance Group reported first-quarter net income of $3.7 million, or 4 cents a share, on revenue of $209.6 million, compared with $28.9 million, or 33 cents, on revenue of $219.5 million, a year ago.

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MORE EARNINGS: C1, C3