McKesson Profit Up as Prescriptions Increase

Drug wholesaler McKesson Corp. said its fiscal second-quarter net income surged from increased prescription usage and improvements at its information systems business.

The San Francisco company’s net income rose 25% to $156.5 million, or 53 cents a share, from $124.8 million, or 42 cents, in last year’s quarter. Excluding sales to customer warehouses, revenue rose to $11.8 billion from $10.3 billion a year earlier.

However, McKesson warned that hospital chain HCA Inc., its largest customer for medical-surgical supplies, has indicated that McKesson is not likely to retain the business, leading to a loss of $300 million in revenue over the next year.

McKesson shares rose $1.09 to $33.81 on the NYSE before the earnings announcement.

* Park Place Entertainment Corp., the largest U.S. casino company, said third-quarter profit rose 20%, boosted by the development of an arena at its Caesars Palace casino in Las Vegas. Net income at the owner of Bally’s and Flamingo casinos rose to $48 million, or 16 cents a share, from $40 million, or 13 cents, a year earlier. Revenue rose less than 1% to $1.22 billion, the Las Vegas-based firm said.

* Western Digital Corp. of Lake Forest said fiscal first-quarter profit fell 77% on acquisition costs. Net income declined to $5 million, or 2 cents a share, from $22.2 million, or 11 cents, a year earlier. Sales rose 23% to $714.2 million.

* Emulex Corp., whose computer chips and cards are used in data-storage machines, said first-quarter profit declined to $22.6 million, or 27 cents a share, from $32 million, or 37 cents, a year earlier, when profit was boosted by gains on the repurchase of convertible notes. Sales rose 20% to $84.6 million, the Costa Mesa company said.

* Sales and profit fell at Callaway Golf Co. The Carlsbad, Calif.-based maker of golf clubs and apparel said quarterly revenue dropped 4% to $154 million. Net income fell 71% to $2 million, or 3 cents a share, from $7 million, or 11 cents, last year.