Ahead of the Bell: McKesson trumps 1Q expectations

Shares of McKesson Corp. are expected to climb in Friday trading, a day after the prescription drug distributor beat analyst expectations for its fiscal first-quarter earnings, raised its quarterly dividend and hiked its net income forecast.

The San Francisco company, which also provides information technology services, said Thursday after markets closed that it earned $424 million, or $1.83 per share, in the three months that ended June 30. That's up from $380 million, or $1.58 per share, in last year's quarter.

Revenue grew 5 percent to $32.2 billion, and adjusted earnings totaled $2.07 per share.

Analysts expected, on average, earnings of $1.70 per share on $32.56 billion in revenue, according to FactSet.

The company also said its board of directors approved an increase in its quarterly dividend to 24 cents per share from 20 cents per share. That dividend will be payable on Oct. 1 to stockholders of record on Sept. 3.

McKesson also said Thursday evening that it now expects adjusted fiscal 2014 earnings per share from continuing operations of $8.05 to $8.35 per share. That's an increase from its previous forecast for earnings of $7.90 to $8.20 per share.

The company clearly is "executing well across multiple fronts," Raymond James analyst John W. Ransom said in a Friday morning research note.

He expects the stock to climb in morning trading, but the analyst also repeated his "Market Perform" rating on the shares and said he prefers to wait for a better entry point.

The stock closed at $118.58 on Thursday and has climbed more than 22 percent so far this year.