Operating profit for the Technology Solutions unit of McKesson Corp. fell 11% to $81 million while revenue increased 3% to $771 million during the third quarter of fiscal 2010, which ended Dec. 31.

Software sales fell two percent to $138 million, hardware dropped 32% to $23 million and services revenue increased six percent to $610 million. Reduced profit primarily resulted from a decrease in gross profit margin because of a higher software deferral rate and amortization related to the Horizon Enterprise Revenue Management product that was introduced in the second quarter. Going forward, the company is well positioned to benefit from stimulus funding, according to John Hammergren, chair and CEO.

For the first nine months of fiscal 2010, the Technology Solutions had operating income of $300 million, up 32% from the same period a year earlier. Nine-month revenues rose two percent to $2.3 billion. Software revenues fell two percent, hardware was off 29% and services rose five percent.

McKesson also announced it will offer physicians its Practice Partner, Lytec MD and Medisoft practice management/electronic health records applications bundled with hardware from Hewlett-Packard that is preconfigured for easier installation.

More information is available at mckesson.com.

--Joseph Goedert

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