What was the primary driver of McKesson's revenue growth in this period?

The primary driver of McKesson's significant revenue growth was the acquisition of Celesio AG, which was completed in February 2014. This acquisition substantially increased the scale of the company's Distribution Solutions segment, particularly its international operations.

How did the acquisition of Celesio impact McKesson's financial statements beyond revenue?

The Celesio acquisition had several impacts. It led to a significant increase in operating expenses due to integration costs and amortization of acquired intangible assets. Furthermore, the noncontrolling interests in Celesio were reclassified as 'Redeemable Noncontrolling Interests' due to a put right granted to noncontrolling shareholders, which impacts the equity section of the balance sheet and will lead to future payments or adjustments.

Are there any significant legal or regulatory issues that investors should be aware of?

Yes, McKesson is involved in ongoing legal and regulatory matters. Key areas include investigations by the U.S. Department of Justice and DEA concerning the distribution of controlled substances, and potential Value Added Tax (VAT) assessments in foreign countries. While the company believes it has strong defenses in many cases, the ultimate resolution could result in substantial costs or operational changes.

What is the outlook for McKesson's liquidity and financial resources?

McKesson expects its available cash generated from operations, along with its existing sources of liquidity (accounts receivable sales facility, revolving credit facility, commercial paper), to be sufficient to fund its capital expenditures, working capital, and other cash requirements. The company reported $4.59 billion in cash and cash equivalents at the end of the period, indicating a solid liquidity position.

MCK 10-Q Quarterly Report Q3 FY2015 — Revenue, Net Income, EPS

Summary

McKesson Corporation's third quarter and first nine months of fiscal year 2015 reported significant revenue growth, largely driven by the strategic acquisition of Celesio AG in February 2014. Revenues surged by 37% and 36% for the respective periods, with the Distribution Solutions segment being the primary contributor. Despite the revenue increase, investors should note the impact of various charges and expenses, including integration costs for Celesio, LIFO inventory adjustments, and previously disclosed litigation expenses. While net income attributable to McKesson Corporation showed a substantial increase to $472 million ($2.00 per diluted share) for the quarter and $1,344 million ($5.72 per diluted share) for the nine months, this was also influenced by the reclassification of Celesio's noncontrolling interests to redeemable noncontrolling interests, reflecting a significant financial restructuring related to the acquisition. The company affirmed its liquidity position, expecting sufficient cash flow to fund operations. However, potential legal and regulatory challenges, particularly concerning controlled substance distribution, remain a factor to monitor.

Financial Highlights

53 data points

Beta

Revenue

$46.48B

0.1% Gross Margin

Net Income

$472.00M

0.0% Net Margin

EPS (Diluted)

$2.00

Total Assets

$55.11B

Cash & Equivalents

$4.59B

Free Cash Flow

$973.00M

Financial Statements

Beta

Revenue	$46.48B
Cost of Revenue	$43.59B
Gross Profit	$2.90B
Operating Expenses	$2.10B
Operating Income	$800.00M
Net Income	$472.00M
EPS (Basic)	$2.03
EPS (Diluted)	$2.00
Shares Outstanding (Basic)	232.00M
Shares Outstanding (Diluted)	236.00M

Key Highlights

1Revenue significantly increased by 37% for the quarter and 36% for the nine months, primarily due to the acquisition of Celesio AG.
2Net income attributable to McKesson Corporation grew substantially, reaching $472 million ($2.00 per diluted share) for the quarter and $1,344 million ($5.72 per diluted share) for the nine months.
3The acquisition of Celesio AG has led to a reclassification of noncontrolling interests to redeemable noncontrolling interests, impacting equity structure.
4Operating expenses increased significantly (59% for the quarter, 61% for nine months), largely driven by the Distribution Solutions segment, partly due to Celesio integration and amortization of intangible assets.
5Discontinued operations resulted in a net loss of $2 million for the quarter and $30 million for the nine months, reflecting ongoing divestiture activities.
6The company maintains a strong liquidity position, with cash and cash equivalents of $4.59 billion at the end of the period, and expects sufficient resources to fund operations.
7Legal and regulatory matters, including investigations into controlled substance distribution and potential VAT assessments, continue to be areas of focus and potential financial impact.

MCKESSON CORP Quarterly Report for Q3 Ended Dec 31, 2014

Summary

Financial Highlights

Key Highlights

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