What was the primary driver of the significant revenue increase reported in this period?

The primary driver of the substantial revenue increase was the acquisition of Celesio AG in February 2014. This acquisition significantly expanded McKesson's international presence and contributed a large portion of the reported revenues for both the quarter and the first six months of the fiscal year.

How did the acquisition of Celesio impact the company's operating expenses?

The acquisition of Celesio led to a notable increase in operating expenses. This was primarily due to integration-related expenses, higher amortization of acquired intangible assets, and increased costs associated with supporting business growth following the acquisition. Prior year litigation charges also played a role in the year-over-year comparison.

What is the company's outlook on liquidity and its ability to meet financial obligations?

McKesson expects its available cash generated from operations, combined with existing liquidity sources such as its accounts receivable sales facility and revolving credit facility, to be sufficient for its capital expenditures, working capital, and other cash requirements. The company is confident in its ability to meet its financing needs in the foreseeable future.

Are there any significant legal or contingent liabilities that investors should be aware of?

The company is subject to various claims, legal actions, and government investigations. Notably, there are ongoing legal proceedings related to the Celesio acquisition and investigations concerning the distribution of controlled substances. While the company accrues for probable and estimable losses, the outcome of many of these matters is uncertain and could potentially have a material adverse impact on its financial position or results of operations.

MCK 10-Q Quarterly Report Q2 FY2015 — Revenue, Net Income, EPS

Summary

McKesson Corporation reported strong revenue growth for the quarter and six months ending September 30, 2014, with a significant portion driven by the acquisition of Celesio AG in February 2014. This strategic move expanded McKesson's global footprint, contributing substantially to revenue and gross profit increases. Despite higher operating expenses, largely due to integration costs and amortization from the Celesio acquisition, the company demonstrated improved profitability from continuing operations. Investors will note the company's continued focus on returning value through dividends, while also managing its debt levels following the acquisition.

Financial Highlights

53 data points

Beta

Revenue

$44.16B

0.1% Gross Margin

Net Income

$469.00M

0.0% Net Margin

EPS (Diluted)

$1.99

Total Assets

$52.23B

Cash & Equivalents

$3.80B

Free Cash Flow

-$124.00M

Financial Statements

Beta

Revenue	$44.16B
Cost of Revenue	$41.30B
Gross Profit	$2.86B
Operating Expenses	$2.08B
Operating Income	$787.00M
Net Income	$469.00M
EPS (Basic)	$2.02
EPS (Diluted)	$1.99
Shares Outstanding (Basic)	232.00M
Shares Outstanding (Diluted)	235.00M

Key Highlights

1Revenue surged by 36% year-over-year for both the quarter and six-month period, largely attributable to the acquisition of Celesio AG.
2Gross profit increased by 45% year-over-year, driven by the Celesio acquisition and growth in other Distribution Solutions businesses.
3Operating expenses rose by 60-63% due to integration costs, amortization of acquired intangibles related to Celesio, and prior year AWP litigation charges.
4Income from continuing operations saw a healthy increase of 16% for the quarter and 8% for the six-month period.
5Diluted Earnings Per Share (EPS) from continuing operations grew to $2.05 for the quarter and $3.83 for the six months, up from $1.82 and $3.66, respectively.
6The company continued its shareholder return program with $0.24 per share declared as a dividend for the quarter.
7Goodwill increased significantly due to the Celesio acquisition, reflecting the premium paid over the fair value of net identifiable assets.

MCKESSON CORP Quarterly Report for Q2 Ended Sep 30, 2014

Summary

Financial Highlights

Key Highlights

Frequently Asked Questions