McKesson Corporation, an American company specializing in pharmaceutical distribution, health information technology, medical supplies, and care management tools, has established itself as a prominent player in the healthcare industry.
With its headquarters located in Irving, Texas, McKesson serves as a leading distributor of healthcare systems, medical supplies, and pharmaceutical products throughout North America. The company’s extensive network infrastructure has positioned it as an early adopter of innovative technologies such as bar-code scanning for distribution, pharmacy robotics, and RFID tags.
While McKesson has garnered significant success and recognition in the healthcare sector, it has also faced legal challenges. The company has been implicated in a federal lawsuit alleging profiteering from the opioid epidemic in the United States, indicating a complex landscape in which it operates.
As of May 26, 2023, McKesson’s net worth stands at an impressive $53.60 billion. This substantial financial standing reflects the company’s strong market presence, comprehensive offerings, and its integral role in the distribution of pharmaceuticals across North America.
Here’s the breakdown of McKesson net worth (for the quarter ended March 31, 2023):
Name: | McKesson Corp (MCK) |
Net Worth: | $52.60B |
Annual Revenue: | $276.711B |
Total Assets: | $62.32B |
Total Liabilities | $63.81B |
This financial analysis is based on McKesson Corporation’s report for the fourth quarter and fiscal year ended March 31, 2023.
Table of Contents
Fourth-Quarter Highlights
Total Revenues Increase: McKesson Corporation reported total revenues of $68.9 billion in the fourth quarter of 2023, representing a 4% increase compared to the same period last year.
Earnings per Diluted Share: Earnings per diluted share from continuing operations stood at $5.71 in Q4 2023, marking a significant increase of $3.23 compared to the previous year.
Adjusted Earnings per Diluted Share: The company achieved adjusted earnings per diluted share of $7.19 in the fourth quarter, reflecting a notable 23% growth compared to the same period last year.
Adjusted Earnings per Diluted Share Excluding Certain Items: McKesson Corporation achieved a 30% increase in adjusted earnings per diluted share, excluding certain items, during the fourth quarter of 2023.
Full-Year Highlights
Total Revenues Growth: McKesson Corporation reported total revenues of $276.7 billion for the full year of 2023, representing a 5% increase compared to the previous year.
Earnings per Diluted Share: Earnings per diluted share from continuing operations for the full year reached $25.05, indicating a substantial increase of $17.79 compared to the previous year.
Adjusted Earnings per Diluted Share: The company achieved adjusted earnings per diluted share of $25.94 for the full year of 2023, reflecting a 9% growth compared to the previous year.
Adjusted Earnings per Diluted Share Excluding Certain Items: McKesson Corporation achieved a 15% increase in adjusted earnings per diluted share, excluding certain items, for the full year of 2023.
Strong Cash Flow and Free Cash Flow: McKesson generated cash flow from operations of $5.2 billion and free cash flow of $4.6 billion during the fiscal year.
Business Highlights
Differentiated Oncology and Biopharma Services Platforms: McKesson continued to advance and expand its differentiated oncology and biopharma services platforms, positioning itself as a leader in community oncology practices with over 2,300 network providers.
Prescription Technology Solutions: McKesson’s Prescription Technology Solutions segment helped patients access their medicine over 24 million times in the fourth quarter, achieving the highest number of patients assisted in the segment’s history.
Awards and Recognitions: McKesson received multiple awards and recognitions for its commitment to diversity and inclusion, as well as its dedication to sustainability, including being recognized by Forbes as one of America’s Best Large Employers in 2023, Newsweek as one of America’s Greatest Workplaces for Women in 2023, and named a 2023 Industry Top-Rated ESG Company by Sustainalytics.
Business Segments
U.S. Pharmaceutical Segment
Fourth-Quarter Performance: Revenues for the U.S. Pharmaceutical segment in the fourth quarter were $61.7 billion, representing a significant 15% increase. The growth was primarily driven by increased volume of specialty products, including higher volumes from retail national account customers, and market growth.
Full-Year Performance: Revenues for the U.S. Pharmaceutical segment for the full year of 2023 reached $240.6billion, reflecting a substantial 13% increase. The growth was primarily driven by increased volume of specialty products, including higher volumes from retail national account customers, and market growth.
Segment Operating Profit: The U.S. Pharmaceutical segment achieved a segment operating profit of $764 million in the fourth quarter and $3.2 billion for the full year. Adjusted segment operating profit for the fourth quarter was $861 million, reflecting a 10% increase, and $3.1 billion for the full year, reflecting a 6% increase. The growth was driven by the distribution of specialty products to providers and health systems, as well as increased contributions from generics programs.
Prescription Technology Solutions Segment
Fourth-Quarter Performance: Revenues for the Prescription Technology Solutions segment in the fourth quarter were $1.2 billion, representing a strong 16% increase. The growth was driven by the growth in prescription volumes in the third-party logistics business and higher technology service revenues.
Full-Year Performance: Revenues for the Prescription Technology Solutions segment for the full year of 2023 reached $4.4 billion, reflecting a solid 14% increase. The growth was driven by the growth in prescription volumes in the third-party logistics business and higher technology service revenues.
Segment Operating Profit: The Prescription Technology Solutions segment achieved a segment operating profit of $166 million in the fourth quarter and $566 million for the full year. Adjusted segment operating profit for the fourth quarter was $218 million, reflecting a significant 35% increase, and $679 million for the full year, reflecting a 15% increase. The growth was driven by the growth in access, affordability, and adherence solutions.
Medical-Surgical Solutions Segment
Fourth-Quarter Performance: Revenues for the Medical-Surgical Solutions segment in the fourth quarter were $2.7 billion, representing a 6% decrease. The decrease was driven by lower sales of COVID-19 tests and lower contribution from kitting, storage, and distribution of ancillary supplies for the U.S. government’s COVID-19 vaccine program. However, there was growth in the primary and extended care businesses.
Full-Year Performance: Revenues for the Medical-Surgical Solutions segment for the full year of 2023 reached $11.1 billion, reflecting a 4% decrease. The decrease was driven by lower sales of COVID-19 tests and lower contribution from kitting, storage, and distribution of ancillary supplies for the U.S. government’s COVID-19 vaccine program. However, there was growth in the primary care business.
Segment Operating Profit: The Medical-Surgical Solutions segment achieved a segment operating profit of $234 million in the fourth quarter and $1.1 billion for the full year. Adjusted segment operating profit for the fourth quarter was $248 million, reflecting a 17% decrease, and $1.2 billion for the full year, reflecting a 4% decrease. The decrease was driven by lower sales of COVID-19 tests and lower contribution from kitting, storage, and distribution of ancillary supplies for the U.S. government’s COVID-19 vaccine program. However, there was growth in the primary care business, including favorable sourcing activities and illness season testing.
International Segment
Fourth-Quarter Performance: Revenues for the International segment in the fourth quarter were $3.4 billion. On an FX-Adjusted basis, revenues were $3.6 billion, reflecting a significant 58% decrease. The decrease was primarily driven by the divestitures of McKesson’s European businesses.
Full-Year Performance: Revenues for the International segment for the full year of 2023 were $20.6 billion. On an FX-Adjusted basis, revenues were $22.5 billion, reflecting a significant 38% decrease. The decrease was primarily driven by the divestitures of McKesson’s European businesses.
Segment Operating Profit: The International segment achieved a segment operating profit of $43 million in the fourth quarter. On an FX-Adjusted basis, adjusted segment operating profit was $88 million, reflecting a 40% decrease. For the full year, segment operating profit was $136 million, and on an FX-Adjusted basis, adjusted segment operating profit was $549 million, reflecting a 22% decrease. The decrease was primarily driven by the divestitures of McKesson’s European businesses.
Fiscal 2024 Outlook
Adjusted Earnings per Diluted Share Guidance: McKesson Corporation provided an adjusted earnings per diluted share guidance range of $26.10 to $26.90 for fiscal year 2024. The guidance reflects expected growth at or above the updated long-term segment targets, execution against strategic growth opportunities, and a disciplined approach to capital allocation, delivering sustainable long-term earnings growth.
Raising Long-Term Adjusted Segment Operating Profit Growth Targets: McKesson Corporation has raised its long-term adjusted segment operating profit growth targets and remains committed to its priorities, including focusing on people and culture, accelerating the expansion of differentiated oncology and biopharma services platforms, and driving sustainable core growth through its distribution business while exploring strategic alternatives for its remaining operations in Norway.
