Summary
McKesson Corporation's (MCK) Form 10-Q for the quarter ending June 29, 2019, reveals a significant turnaround in profitability compared to the previous year. The company reported a net income attributable to McKesson Corporation of $423 million, a substantial improvement from a net loss of $138 million in the same period of 2018. This rebound was driven by strong revenue growth, increasing 6% to $55.7 billion, and a notable reduction in operating expenses, largely due to the absence of a substantial goodwill impairment charge that impacted the prior year's results. The company's financial health shows positive signs with improved earnings per share (EPS) for continuing operations, reaching $2.27 compared to a loss of $0.69 in the prior year. While the company is navigating ongoing legal and regulatory challenges, particularly concerning opioid litigation, the current financial performance indicates a solid operational recovery and a positive outlook for the near term. Investors should monitor the resolution of these legal matters and the company's ability to maintain its revenue growth and cost management strategies.
Financial Highlights
50 data points| Revenue | $55.73B |
| Cost of Revenue | $52.94B |
| Gross Profit | $2.79B |
| Operating Expenses | $2.15B |
| Operating Income | $634.00M |
| Net Income | $423.00M |
| EPS (Basic) | $2.25 |
| EPS (Diluted) | $2.24 |
| Shares Outstanding (Basic) | 188.00M |
| Shares Outstanding (Diluted) | 189.00M |
Key Highlights
- 1Revenue increased by 6% year-over-year to $55.7 billion for the quarter ended June 29, 2019.
- 2Net income attributable to McKesson Corporation turned positive, reaching $423 million, a significant improvement from a net loss of $138 million in the prior year's quarter.
- 3Diluted EPS from continuing operations was $2.27, a substantial recovery from a loss of $0.69 in the prior year.
- 4Operating expenses decreased by 20%, largely due to the absence of a $570 million goodwill impairment charge recorded in the prior year's quarter.
- 5The company's U.S. Pharmaceutical and Specialty Solutions segment saw an 8% revenue increase, demonstrating strength in its core operations.
- 6McKesson repurchased $600 million of its common stock under an Accelerated Share Repurchase (ASR) program initiated in May 2019.
- 7The company's equity method investment in Change Healthcare JV had a carrying value of $3.6 billion, with an ongoing evaluation for potential impairment after Change Healthcare Inc.'s IPO.