Summary
McKesson Corporation's 10-Q filing for the period ending December 30, 2018, indicates a mixed financial performance. While revenues saw an increase of 5% year-over-year for the quarter to $56.2 billion, driven by market growth and acquisitions, net income attributable to McKesson Corporation declined significantly by 48% to $469 million. This decline was largely due to substantial goodwill impairment charges, particularly in the European Pharmaceutical Solutions segment, and increased restructuring and asset impairment charges. The company also incurred significant opioid-related litigation expenses. Despite these challenges, McKesson continues to execute its strategic growth initiatives and returned capital to shareholders through dividends and share repurchases. The company anticipates that its available cash, credit facilities, and commercial paper program will be sufficient to meet its financial obligations. Investors should closely monitor the ongoing litigation regarding controlled substance distribution and the impact of regulatory changes on the company's profitability.
Financial Highlights
51 data points| Revenue | $56.21B |
| Cost of Revenue | $53.24B |
| Gross Profit | $2.97B |
| Operating Expenses | $2.29B |
| Operating Income | $683.00M |
| Net Income | $469.00M |
| EPS (Basic) | $2.41 |
| EPS (Diluted) | $2.40 |
| Shares Outstanding (Basic) | 194.00M |
| Shares Outstanding (Diluted) | 195.00M |
Key Highlights
- 1Revenues increased by 5% to $56.2 billion for the quarter, driven by market growth and acquisitions, though partially offset by customer losses.
- 2Net Income Attributable to McKesson Corporation saw a significant decrease of 48% to $469 million ($2.40 per diluted share) compared to the prior year's quarter, primarily impacted by large impairment charges.
- 3Total operating expenses increased by 22% to $2.3 billion, heavily influenced by $570 million in goodwill impairment charges in the European Pharmaceutical Solutions segment and $110 million in restructuring and asset impairment charges.
- 4The company repurchased $2.0 million shares for $250 million during the quarter as part of its ongoing share repurchase program, demonstrating a commitment to returning capital to shareholders.
- 5The U.S. Pharmaceutical and Specialty Solutions segment showed a robust 6% revenue increase, highlighting its continued strength.
- 6The European Pharmaceutical Solutions segment experienced a 1% revenue decrease, impacted by government reimbursement reductions and retail pharmacy closures.
- 7The company remains subject to significant legal proceedings, most notably the multi-district litigation concerning the distribution of controlled substances (opioids), which continues to be a material risk.