Summary
McKesson Corporation's fiscal year 2016 (ending March 31, 2016) report highlights a period of significant revenue growth, driven primarily by its Distribution Solutions segment, which accounted for approximately 98% of consolidated revenues. The company experienced a 7% increase in total revenues to $190.9 billion, largely due to market growth and expanded business with existing customers in North America, partially offset by unfavorable foreign currency effects and customer losses. Despite revenue growth, the company's gross profit margin saw a slight decrease, mainly attributed to lower sell margins in North America distribution, though this was partially offset by benefits from global procurement arrangements and lower LIFO-related inventory charges. Operating expenses also decreased by 7% year-over-year, benefiting from the sale of certain businesses and lower acquisition-related expenses, but were impacted by restructuring charges. Net income attributable to McKesson Corporation saw a substantial increase of 53% to $2.26 billion, leading to diluted earnings per share of $9.70. The company also continued its commitment to returning capital to shareholders through share repurchases and dividend increases.
Financial Highlights
57 data points| Revenue | $190.88B |
| Cost of Revenue | $179.47B |
| Gross Profit | $11.42B |
| R&D Expenses | $392.00M |
| SG&A Expenses | $7.38B |
| Operating Expenses | $7.87B |
| Operating Income | $3.54B |
| Net Income | $2.26B |
| EPS (Basic) | $9.82 |
| EPS (Diluted) | $9.70 |
| Shares Outstanding (Basic) | 230.00M |
| Shares Outstanding (Diluted) | 233.00M |
Key Highlights
- 1McKesson reported a 7% increase in total revenues to $190.9 billion for fiscal year 2016, driven by its Distribution Solutions segment.
- 2Net income attributable to McKesson Corporation grew significantly by 53% to $2.26 billion, resulting in diluted EPS of $9.70.
- 3The company's Distribution Solutions segment, comprising over 98% of total revenues, saw a 7% increase, primarily from North America pharmaceutical distribution.
- 4Gross profit remained flat year-over-year, with a decline in gross profit margin attributed to lower sell margins in North America distribution, partly offset by improved buy margins and lower LIFO charges.
- 5Operating expenses decreased by 7% due to business divestitures and lower acquisition-related expenses, but were impacted by $229 million in restructuring charges for the 'Cost Alignment Plan'.
- 6The company repurchased approximately $1.5 billion of its common stock during the fiscal year.
- 7McKesson completed several strategic acquisitions and entered into agreements for others, including Rexall Health in Canada, to strengthen its market position.