McKesson beats profit forecasts, but revenue lags

(Reuters) - Pharmaceutical wholesaler McKesson Corp (MCK.N) reported fiscal first-quarter earnings well above forecasts, helped by cost cuts and lower-than-expected taxes, but its revenue came in below Wall Street projections.

The company said on Thursday that it earned $380 million, or $1.58 per share, in its first quarter ending June 30, compared with $286 million, or $1.13 per share, in the year earlier period.

Excluding special items, earnings were $1.55 per share. Analysts, on average, expected $1.48 per share according to Thomson Reuters I/B/E/S.

Revenue rose 3 percent to $30.8 billion, missing Wall Street expectations of $31.1 billion.

Drug distribution revenue rose 3 percent to $29.96 billion, while technology solutions revenue rose 4 percent to $838 million.

"Earnings growth was propelled by stronger-than-expected operating profits in distribution solutions and lower corporate expense, offset in part by weaker tech solution earnings," J.P. Morgan analyst Lisa Gill said in a research note.

Gill said a favorable tax rate of 28.3 percent in the quarter, compared with her expectations of a 30 percent rate, added about 4 cents per share to earnings -- representing most of the earnings beat.

McKesson reaffirmed that it expects fiscal 2013 earnings of $7.05 to $7.35 per share, which would represent growth of about 11 to 15 percent from last year. The company has said the growth will be helped by strong contributions from oral generic pharmaceuticals and would be weighted to the second half of the year, especially the fourth quarter.

McKesson is being helped by recent patent expirations on big drugs such as cholesterol fighter Lipitor and schizophrenia treatment Zyprexa, which have paved the way for cheaper generics that carry better profit margins for distributors than branded medicines.

Shares of the company slipped 24 cents to $92.02 in after hours trading.

(Reporting By Ransdell Pierson; Editing by Steve Orlofsky and Tim Dobbyn)