Summary
McKesson Corporation's 2020 10-K filing highlights a year of significant revenue growth, driven primarily by its U.S. Pharmaceutical and Specialty Solutions segment. The company experienced an 8% increase in revenues, reaching $231.1 billion, fueled by market growth, branded pharmaceutical price increases, and increased volumes. Despite revenue growth, gross profit saw a more modest 2% increase, impacted by factors like lower net cash proceeds from antitrust legal settlements and unfavorable foreign currency exchange fluctuations. The company's financial performance was also significantly affected by non-recurring items. These included substantial goodwill impairment charges in previous years, notably impacting the European Pharmaceutical Solutions segment, and more recently, charges related to the remeasurement of assets for a German wholesale business joint venture. Notably, McKesson completed the separation of its investment in Change Healthcare JV, recognizing a significant gain related to this transaction. The company also addressed ongoing opioid-related litigation, recording a substantial charge for a settlement with two Ohio counties. Operationally, McKesson continued to return value to shareholders through share repurchases ($1.9 billion) and dividends ($294 million). The company maintained a strong liquidity position throughout the year, even as it navigated the initial impacts of the COVID-19 pandemic late in the fiscal year, which had a muted financial impact due to its timing. Looking ahead, McKesson faces ongoing risks related to litigation, regulatory changes, competition, and supply chain disruptions, particularly in light of the evolving COVID-19 situation.
Financial Highlights
57 data points| Revenue | $231.05B |
| Cost of Revenue | $219.03B |
| Gross Profit | $12.02B |
| R&D Expenses | $96.00M |
| SG&A Expenses | $9.18B |
| Operating Expenses | $9.53B |
| Operating Income | $2.49B |
| Interest Expense | $249.00M |
| Net Income | $900.00M |
| EPS (Basic) | $4.98 |
| EPS (Diluted) | $4.95 |
| Shares Outstanding (Basic) | 180.60M |
| Shares Outstanding (Diluted) | 181.60M |
Key Highlights
- 1Revenue increased by 8% to $231.1 billion, primarily driven by the U.S. Pharmaceutical and Specialty Solutions segment.
- 2Gross profit increased by 2%, with operating margins showing pressure due to various charges and increased operating expenses.
- 3The company completed the separation of its investment in Change Healthcare JV, recognizing an estimated gain of $414 million.
- 4McKesson recorded a $275 million charge related to the expected contribution of its German wholesale business to a joint venture.
- 5An opioid-related litigation settlement with two Ohio counties resulted in an $82 million charge.
- 6Shareholders received $2.2 billion in cash through stock repurchases ($1.9 billion) and dividends ($294 million).
- 7The company reported diluted earnings per common share from continuing operations of $4.99, an improvement from the prior year, largely due to divestitures and lower share counts.