Pharmaceutical wholesaler McKesson reported that its quarterly profit rose a better-than-expected 8 percent, led by increased demand for its drug distribution business, and the company raised its full-year earnings forecast.
Shares of McKesson rose more than 4 percent in late trading after closing Tuesday at $58.55.
The San Francisco-based company posted a net profit of $247 million, or 83 cents per share, for its fiscal second quarter ended Sept. 30, compared with a profit of $229 million, or 75 cents per share, a year ago. Sales grew 9 percent to $24.5 billion.
Excluding items, McKesson earned 82 cents per share from continuing operations. That beat analysts' average expectation of 72 cents per share, excluding items, according to Reuters Estimates.
Revenue for the quarter rose 9 percent to $24.5 billion, topping Wall Street estimates of $24.1 billion.
McKesson said it now expects to earn $3.22 to $3.37 per share for its fiscal year ending March 31, up from its previous forecast of $3.15 to $3.30 per share.
The company said it was able to raise its forecast even with two quarters of marginal dilution as a result of its recently closed acquisition of Oncology Therapeutics Network for $575 million.
The drug distribution business saw sales rise 9 percent for the quarter with a gross profit of $848 million, helped by sales of generic medicines, which have a higher profit margin than more expensive branded drugs.
Revenue in the technology solutions unit jumped 36 percent, driven by the acquisition of Per-Se and growth in software and imaging sales to hospitals, clinics and physician offices.
McKesson shares are up about 16 percent for the year, outpacing those of its rivals, Cardinal Health and AmerisourceBergen, whose shares are up about 3.6 percent and 2.4 percent, respectively.