What were the main drivers of McKesson's revenue growth in this period?

McKesson's revenue growth was primarily driven by its Distribution Solutions segment, which accounts for the vast majority of its revenue. Growth was supported by market expansion, increased volume from both new and existing customers, and a shift in revenue recognition from warehouse sales to direct store delivery. The Canadian pharmaceutical distribution segment also saw growth, partly due to foreign currency exchange rate changes.

What factors led to the decrease in income from continuing operations?

The decrease in income from continuing operations was significantly impacted by non-recurring charges. These included a $72 million non-cash asset impairment charge related to capitalized software for the Horizon Enterprise Revenue Management (HzERM) product and a $24 million charge for Average Wholesale Price (AWP) litigation settlement. In the prior year's comparable period, the company benefited from a $20 million credit related to securities litigation, further impacting the year-over-year comparison.

How did the sale of McKesson Asia Pacific Pty Limited (MAP) affect the company's financial results?

The sale of MAP, a subsidiary within the Technology Solutions segment, generated a pre-tax gain of $95 million and an after-tax gain of $72 million. This gain was recognized as a discontinued operation and significantly boosted net income for both the quarter and the six-month period, as well as the overall diluted earnings per share. The sale also allowed the company to utilize capital loss carry-forwards.

What is the company's liquidity position and outlook?

McKesson maintained a strong liquidity position. Available cash from operations, combined with its accounts receivable securitization facility and revolving credit facility, were expected to be sufficient to fund its capital expenditures, working capital, and other cash requirements. The company also continued to return capital to shareholders through dividends and significant share repurchases, including an accelerated share repurchase program.

MCK 10-Q Quarterly Report Q2 FY2011 — Revenue, Net Income, EPS

Summary

McKesson Corporation (MCK) reported its financial results for the fiscal second quarter and first six months ended September 30, 2010. The company demonstrated modest revenue growth, with a 1% increase for the quarter and a 2% increase for the six-month period, reaching $27.5 billion and $55.0 billion, respectively. This growth was primarily driven by its Distribution Solutions segment, which constitutes the majority of its revenue. However, income from continuing operations saw a decline, down 15% for the quarter and 6% for the six months, largely due to significant one-time charges including a $72 million asset impairment charge for capitalized software and a $24 million charge for Average Wholesale Price (AWP) litigation. Despite these challenges, net income increased by 9% for the quarter and 6% for the six months, boosted by a $72 million after-tax gain from the sale of its subsidiary, McKesson Asia Pacific Pty Limited. Earnings per diluted share from continuing operations decreased, but total diluted earnings per share saw an increase due to the aforementioned gain on sale and the impact of share repurchases. The company also highlighted its strong liquidity position and continued commitment to returning capital to shareholders through dividends and share repurchases.

Financial Highlights

48 data points

Beta

Revenue

$27.53B

0.0% Gross Margin

Net Income

$327.00M

0.0% Net Margin

EPS (Diluted)

$1.25

Total Assets

$26.79B

Cash & Equivalents

$3.05B

Free Cash Flow

$215.00M

Financial Statements

Beta

Revenue	$27.53B
Cost of Revenue	$26.17B
Gross Profit	$1.37B
Operating Expenses	$949.00M
Operating Income	$417.00M
Net Income	$327.00M
EPS (Basic)	$1.27
EPS (Diluted)	$1.25
Shares Outstanding (Basic)	258.00M
Shares Outstanding (Diluted)	262.00M

Key Highlights

1Revenue increased by 1% to $27.5 billion for the quarter and 2% to $55.0 billion for the six months, driven by the Distribution Solutions segment.
2Income from continuing operations decreased by 15% to $255 million for the quarter and 6% to $553 million for the six months, impacted by significant charges.
3A $72 million non-cash asset impairment charge for capitalized software and a $24 million charge for Average Wholesale Price (AWP) litigation significantly impacted quarterly results.
4Net income rose by 9% to $327 million for the quarter and 6% to $625 million for the six months, aided by a $72 million gain from the sale of a subsidiary (McKesson Asia Pacific Pty Limited).
5Diluted earnings per share from continuing operations declined, but overall diluted EPS increased to $1.25 for the quarter and $2.34 for the six months, benefiting from the gain on sale and share repurchases.
6The company repurchased approximately 14.6 million shares for $1 billion under an accelerated share repurchase program completed in July 2010.
7McKesson raised its quarterly dividend to $0.18 per common share in May 2010.

MCKESSON CORP Quarterly Report for Q2 Ended Sep 30, 2010

Summary

Financial Highlights

Key Highlights

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