McKesson Corporation (MCK) recently announced that its executive vice president and chief financial officer (:CFO), Jeffrey C. Campbell, will quit from his positions at the end of Jun 2013 to join American Express Company (AXP).
Campbell has been the CFO of McKesson during the last 10 years and played a key role in the company’s phenomenal growth trajectory wherein revenues jumped significantly from $68 billion in fiscal 2004 to $122 billion in fiscal 2013.
Meanwhile, Nigel A. Rees, the current vice president and controller, will assume the role of interim CFO, effective Jun 28, until the time McKesson finds a permanent CFO.
Shares of the company were down 2.76% following the news to close at $110.79.
We note that 2013 will be a challenging year for major healthcare services providers such as McKesson and AmerisourceBergen (ABC), given a slowdown in generic launches.
McKesson expects contributions from recent acquisitions to help combat the impact of the slowdown in generic launches. The company believes revenues in its Distribution Solutions segment will rebound in fiscal 2014 due to the addition of PSS World Medical and demand from existing customers.
Growth in the Technology Solutions segment is also expected to accelerate from fiscal 2013 levels primarily due to the impact of acquisitions.
We remind investors that McKesson acquired PSS World Medical in Feb 2013. The addition of PSS World Medical to the company’s product line will amalgamate distribution capabilities along with product and technology expertise of both businesses.
We believe the acquisition will further bolster the Medical Surgical Distribution business of McKesson.
We expect the company to throw more light on the business environment and its search for a new CFO at its upcoming investor day on Jun 26, 2013.
McKesson currently carries a Zacks Rank #3 (Hold). Right now, Cardinal Health, Inc. (CAH) looks attractive with a Zacks Rank #2 (Buy).
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