10-KPeriod: FY2024

MCKESSON CORP Annual Report, Year Ended Mar 31, 2024

Filed May 8, 2024For Securities:MCK

Summary

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.

Financial Highlights

56 data points
Beta

Revenue

$308.95B

4.2% Gross Margin

Net Income

$3.00B

1.0% Net Margin

EPS (Diluted)

$22.39

Total Assets

$67.44B

Cash & Equivalents

$4.58B

Free Cash Flow

$3.88B

Financial Statements
Beta
Revenue$308.95B
Cost of Revenue$296.12B
Gross Profit$12.83B
SG&A Expenses$8.66B
Operating Expenses$8.92B
Operating Income$3.91B
Interest Expense$252.00M
Net Income$3.00B
EPS (Basic)$22.54
EPS (Diluted)$22.39
Shares Outstanding (Basic)133.20M
Shares Outstanding (Diluted)134.10M

Key Highlights

  • 1Revenues increased by 12% year-over-year, largely driven by the U.S. Pharmaceutical segment.
  • 2Diluted earnings per share from continuing operations decreased to $22.39 from $25.05 in the prior year.
  • 3Recorded a $725 million provision for bad debts due to the bankruptcy of customer Rite Aid.
  • 4Made opioid-related payments totaling $544 million and recorded a charge of $149 million related to a proposed hospital settlement.
  • 5Returned $3.3 billion to shareholders through $3.0 billion in stock repurchases and $314 million in dividends.
  • 6The U.S. Pharmaceutical segment's operating profit decreased by 13%, impacted by the Rite Aid provision and opioid charges.
  • 7The Prescription Technology Solutions segment saw a 48% increase in operating profit, driven by higher volumes and new customer contributions.

Frequently Asked Questions

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.

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.

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.