SAN FRANCISCO (AP) -- Pharmaceutical distributor McKesson Corp. said Monday that its profit nearly doubled in the fiscal third quarter as sales improved, and the company put less money in reserve for lawsuits.
McKesson said its profit grew to $300 million, or $1.22 per share, in the quarter ended Dec. 31. A year earlier it reported a profit of $155 million, or 61 cents per share.
Excluding one-time costs like the litigation charge, McKesson said it earned $1.40 per share in the most recent quarter. Its revenue rose 9 percent to $30.84 billion from $28.25 billion.
Analysts expected the company to report a profit of $1.38 per share and $30.21 billion in revenue, according to FactSet.
The company set aside $27 million to increase its litigation reserves. During the third quarter of 2011 it set aside $189 million for the same purpose. The funds cover claims against McKesson over drug-reimbursement benchmarks used in Medicaid, the government health program for low-income people.
McKesson said its distribution revenue grew 9 percent in the third quarter, but government price restrictions in Canada hurt its business in that country.
McKesson also said it will pay $920 million Canadian ($917.9 million) for the independent banner and franchise businesses of retail pharmacy operator Katz Group Canada Inc. The independent banner business is called Drug Trading Co. Ltd., and it runs 850 pharmacies. The franchise business, Medicine Shoppe Canada Inc., services about 160 independent pharmacies. McKesson expects the deal to close during the first half of 2012.
The company will remain the primary drug distributor to Katz Group's company-owned stores.
McKesson also approved the repurchase of $650 million in company stock. It has authorized the repurchase of $1.5 billion in stock. The company also backed its fiscal-year profit outlook, calling for adjusted income of $6.19 to $6.39 per share.
Analysts expect McKesson to earn $6.33 per share on average.
Shares of McKesson slipped 62 cents to $78.69 on Monday, and advanced $2.36, or 3 percent, to $81.05 in aftermarket trading.
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