MCKESSON CORP Annual Report, Year Ended Mar 31, 2023

McKesson Corporation's (MCK) 2023 10-K filing highlights a year of strategic divestitures and acquisitions, with a notable focus on exiting European operations while strengthening its Prescription Technology Solutions (RxTS) segment. Revenues saw a 5% increase, primarily driven by growth in the U.S. Pharmaceutical segment, which benefited from market growth, specialty pharmaceuticals, and higher branded drug prices. This top-line expansion was partially offset by divestitures in the International segment and unfavorable foreign currency impacts. Despite revenue growth, gross profit experienced a 6% decrease, mainly due to the European divestitures and foreign currency impacts, though this was partially mitigated by gains in specialty pharmaceuticals and generics within the U.S. Pharmaceutical segment. The company demonstrated strong expense management, with total operating expenses decreasing by 28%, largely due to the prior year's significant remeasurement charges related to European divestitures. Diluted earnings per share from continuing operations saw a substantial increase, primarily attributed to the reduced remeasurement charges compared to the prior year and a lower share count resulting from ongoing share repurchase programs. Key strategic moves included the acquisition of Rx Savings Solutions, LLC, to enhance patient affordability and adherence solutions, and the formation of SCRI Oncology, LLC with HCA Healthcare to advance cancer research. The company also returned significant capital to shareholders through share repurchases and increased its quarterly dividend. Investors should monitor the ongoing opioid litigation, which continues to be a significant contingent liability, although the company has made substantial progress on settlements.