01—Abstract
Summary
Summary of the 10-K filed May 8, 2024. Cited figures are marked; the original filing is the authoritative source.
McKesson Corporation (MCK) has filed its 10-K for the fiscal year ended March 30, 2024, detailing its performance as a diversified healthcare services leader.
The company reported increased revenues, primarily driven by its U.S. Pharmaceutical segment, which benefited from growth in specialty pharmaceuticals and higher volumes. However, diluted earnings per share saw a decrease compared to the prior year, impacted by a significant provision for bad debts related to the bankruptcy of its customer, Rite Aid. Mckesson continues to manage various legal and regulatory matters, including significant opioid-related litigation, which resulted in a substantial charge for the current fiscal year.
Despite these challenges, the company returned considerable capital to shareholders through share repurchases and dividends, underscoring its commitment to shareholder value. The company also highlighted its ongoing investments in technology and operational efficiencies across its four main business segments: U.S. Pharmaceutical, Prescription Technology Solutions, Medical-Surgical Solutions, and International.
02—Key points
Key Highlights
- Revenues increased by 12% year-over-year, largely driven by the U.S. Pharmaceutical segment.
- Diluted earnings per share from continuing operations decreased to $22.39 from $25.05 in the prior year.
- Recorded a $725 million provision for bad debts due to the bankruptcy of customer Rite Aid.
- Made opioid-related payments totaling $544 million and recorded a charge of $149 million related to a proposed hospital settlement.
- Returned $3.3 billion to shareholders through $3.0 billion in stock repurchases and $314 million in dividends.
- The U.S. Pharmaceutical segment's operating profit decreased by 13%, impacted by the Rite Aid provision and opioid charges.
- The Prescription Technology Solutions segment saw a 48% increase in operating profit, driven by higher volumes and new customer contributions.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, McKesson Corp kept $0.01.
- Revenue$308.95B100.0%
- Cost of revenue−$296.12B95.8%
- Gross profit$12.83B4.2%
- Operating costs−$8.92B2.9%
- Operating income$3.91B1.3%
- Interest, other & tax−$907.0M0.3%
- Net income$3.00B1.0%
Where FY2024 revenue went
$308.95B- Cost of revenue: $296.12B, 96% of revenue
- Net income: $3.00B, 1.0% of revenue
- SG&A: $8.66B, 2.8% of revenue
Kept 1.0% as net incomeNet income $3.00B · 1.0%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed May 8, 2024Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $308.95B$276.71B | +11.7% |
| Cost of Revenue | $296.12B$264.35B | +12.0% |
| Gross Profit | $12.83B$12.36B | +3.8% |
| SG&A Expenses | $8.66B$7.78B | +11.3% |
| Operating Expenses | $8.92B$7.98B | +11.8% |
| Operating Income | $3.91B$4.38B | −10.8% |
| Interest Expense | $252.00M$248.00M | +1.6% |
| Net Income | $3.00B$3.56B | −15.7% |
| EPS (Basic) | $22.54$25.23 | −10.7% |
| EPS (Diluted) | $22.39$25.03 | −10.5% |
| Shares Outstanding (Basic) | 133.20M141.10M | −5.6% |
| Shares Outstanding (Diluted) | 134.10M142.20M | −5.7% |
05—Questions
Frequently Asked Questions
What was the primary driver of revenue growth for McKesson in the past fiscal year?
McKesson's revenue increased by 12% year-over-year, primarily due to market growth in its U.S. Pharmaceutical segment, which benefited from higher volumes, particularly from retail national account customers, and growth in specialty pharmaceuticals. Higher pharmaceutical prices also contributed to the revenue increase.
What significant headwinds did McKesson face during the fiscal year, and how did they impact earnings?
McKesson recorded a significant headwind in the form of a $725 million provision for bad debts due to the bankruptcy of its customer, Rite Aid. Additionally, the company incurred charges related to opioid-related claims and litigation. These factors, combined with other operational expenses, contributed to a decrease in diluted earnings per share from continuing operations to $22.39 from $25.05 in the prior fiscal year.
How is McKesson managing its capital and returning value to shareholders?
McKesson returned $3.3 billion to shareholders during fiscal year 2024, consisting of $3.0 billion in common stock repurchases and $314 million in dividend payments. The Board also approved an increase of $6.0 billion to the existing stock repurchase authorization, with $6.6 billion remaining as of March 31, 2024. The company anticipates continuing to pay quarterly cash dividends.
06—Continue