McKesson’s Restructuring Hampers Results

McKesson Corp.’s profit rose slightly in its fiscal first quarter, but not enough to meet analysts’ expectations as the nation’s largest prescription drug distributor paid the price for reshuffling some operations.

The San Francisco-based company said Thursday that it earned $184 million, or 60 cents a share, for the three months ended in June. That represented an 8% increase from $171 million, or 55 cents, a year earlier. Revenue rose 13% to $23.6 billion.

The earnings were 2 cents below the average estimate of analysts surveyed by Thomson Financial.

McKesson absorbed a $26-million charge to account for a reorganization of its technology division and the decreased value of an investment in a company that supplied pharmacies with robotic equipment to automatically dispense drugs.

The company reaffirmed its financial outlook for the remainder of its fiscal year, which will end in March 2007.

The company’s share price has slipped this year, a reversal from last year when it climbed 64% amid optimism about McKesson’s improving performance as management moved closer to resolving the legal fallout from an accounting debacle that erupted in 1999.

As has been the case for several quarters, rising sales of generic drugs continued to provide McKesson a shot in the arm. McKesson also is benefiting from increasing automation in hospitals and doctors’ offices. Sales of the company’s software and peripheral products rose 27% in the quarter.

McKesson’s shares fell 51 cents to $49.76, then regained 20 cents in extended trading after the quarterly results came out.