IRVING, Texas
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May 11, 2023
(press release)
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Fourth-Quarter Highlights: Full-Year Highlights: Fiscal 2024 Outlook: McKesson Corporation (NYSE:MCK) today reported results for the fourth-quarter and fiscal year ended March 31, 2023. Fiscal 2023 Fourth-Quarter and Full-Year Result Summary “Our strong fourth quarter represented continued operating momentum and execution against our company priorities,” said Brian Tyler, chief executive officer. “For the full year, McKesson reported performance across all business segments above our long-term targets. Our results reflect the commitment of our employees and their dedication to perform for customers, patients, communities, and shareholders. I want to thank the over 50,000 team members across McKesson for their dedication to delivering on our purpose to advance health outcomes for all.” “Looking ahead to fiscal 2024, we are well positioned to leverage the differentiated assets and capabilities across McKesson to execute on our strategies, drive sustainable growth and create value for all stakeholders,” said Mr. Tyler. “We continue to invest for the long term, and our leadership positions, execution, and confidence in the future support our updated long-term segment growth targets.” Fourth-quarter revenues were $68.9 billion, an increase of 4% from a year ago, and full-year revenues were $276.7 billion, an increase of 5%, primarily driven by growth in the U.S. Pharmaceutical segment, partially offset by lower revenues in the International segment as a result of the completed divestitures of McKesson’s European businesses. Fourth-quarter earnings per diluted share from continuing operations was $5.71 compared to $2.48 a year ago, an increase of $3.23. Full-year earnings per diluted share from continuing operations was $25.05 compared to $7.26 a year ago, an increase of $17.79. Fourth-quarter Adjusted Earnings per Diluted Share was $7.19 compared to $5.83 a year ago, an increase of 23%, driven by lower tax rate, lower share count, and growth in the U.S. Pharmaceutical and Prescription Technology Solutions segments. Full-year Adjusted Earnings per Diluted Share was $25.94 compared to $23.69 a year ago, an increase of 9%, driven by a lower share count and growth in the U.S. Pharmaceutical segment, partially offset by lower contributions in the International segment as a result of the completed divestitures of McKesson's European businesses. For the full-year, McKesson returned $3.9 billion of cash to shareholders, which included $3.6 billion of common stock repurchases and $292 million of dividend payments. During the fiscal year, McKesson generated cash from operations of $5.2 billion, and invested $558 million in capital expenditures, resulting in Free Cash Flow of $4.6 billion. Business Highlights U.S. Pharmaceutical Segment Fourth-Quarter Full-Year Prescription Technology Solutions Segment Fourth-Quarter Full-Year Medical-Surgical Solutions Segment Fourth-Quarter Full-Year International Segment Fourth-Quarter Full-Year Fiscal 2024 Outlook McKesson does not provide forward-looking guidance on a GAAP basis as the Company is unable to provide a quantitative reconciliation of forward-looking Non-GAAP measures to the most directly comparable forward-looking GAAP measure, without unreasonable effort, because McKesson cannot reliably forecast LIFO inventory-related adjustments, certain litigation loss and gain contingencies, restructuring, impairment and related charges, and other adjustments, which are difficult to predict and estimate. These items are inherently uncertain and depend on various factors, many of which are beyond the company’s control, and as such, any associated estimate and its impact on GAAP performance could vary materially. McKesson anticipates Fiscal 2024 Adjusted Earnings per Diluted Share of $26.10 to $26.90, which reflects expected growth at or above 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 continues to strengthen its portfolio of differentiated assets and capabilities to advance healthcare for all. As COVID-19 related contracts with the U.S. government are scheduled to end in July 2023, and the contribution from Europe continues to run off as guided, McKesson remains committed to its company priorities: As a result of strong execution against our strategic initiatives, operating momentum, and building on our differentiated assets and capabilities, McKesson is well positioned for strong growth in the years ahead and is raising long-term Adjusted Segment Operating Profit growth targets as follows: Conference Call Details McKesson has scheduled a conference call for today, Monday, May 8th at 4:30 PM ET to discuss the company’s financial results. The audio webcast of the conference call will be available live and archived on McKesson's Investor Relations website at investor.mckesson.com. Upcoming Investor Events McKesson management will be participating in the following investor conference: The audio webcast, and a complete listing of upcoming events for the investment community, including details and updates, will be available on McKesson's Investor Relations website. Non-GAAP Financial Measures GAAP refers to the U.S. generally accepted accounting principles. This press release includes GAAP financial measures as well as Non-GAAP financial measures, including Adjusted Gross Profit, Adjusted Operating Expenses, Adjusted Other Income, Adjusted Loss on Debt Extinguishment, Adjusted Interest Expense, Adjusted Income Tax Expense, Adjusted Earnings, Adjusted Earnings per Diluted Share, Adjusted Earnings per Diluted Share Excluding Certain Items, Adjusted Segment Operating Profit, Adjusted Segment Operating Profit Margin, Adjusted Corporate Expenses, Adjusted Operating Profit, FX-Adjusted results and Free Cash Flow which are financial measures not calculated in accordance with GAAP. Refer to the “Supplemental Non-GAAP Financial Information” section of the accompanying financial statement tables for the definitions and usefulness of the Company’s Non-GAAP financial measures and the attached schedules for reconciliations of the differences between the Non-GAAP financial measures and their most directly comparable GAAP financial measures. The Company does not provide forward-looking guidance on a GAAP basis as McKesson is unable to provide a quantitative reconciliation of forward-looking Non-GAAP measures to the most directly comparable forward-looking GAAP measure, without unreasonable effort, because McKesson cannot reliably forecast LIFO inventory-related adjustments, certain litigation loss and gain contingencies, restructuring, impairment and related charges, and other adjustments, which are difficult to predict and estimate. These items are inherently uncertain and depend on various factors, many of which are beyond the company’s control, and as such, any associated estimate and its impact on GAAP performance could vary materially. Cautionary Statements This earnings release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may be identified by their use of terminology such as “believes,” “expects,” “anticipates,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “projects,” “plans,” “estimates,” “targets,” or the negative of these words or other comparable terminology. The discussion of financial outlook, guidance, trends, strategy, plans, assumptions, or intentions may also include forward-looking statements. Readers should not place undue reliance on forward-looking statements, such as financial performance forecasts, which speak only as of the date they are first made. Except to the extent required by law, we undertake no obligation to update or revise our forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected, anticipated, or implied. Although it is not possible to predict or identify all such risks and uncertainties, we encourage investors to read the risk factors described in our most recent annual and periodic report filed with the Securities and Exchange Commission. These risk factors include, but are not limited to: we experience costly and disruptive legal disputes and settlements, including regarding our role in distributing controlled substances such as opioids; we might experience losses not covered by insurance or indemnification; we are subject to frequently changing, extensive, complex, and challenging healthcare and other laws; we from time to time record significant charges from impairment to goodwill, intangibles, and other long-lived assets; we might not realize expected benefits from business process initiatives; we experience cybersecurity incidents that might significantly compromise our technology systems or might result in material data breaches; we may be unsuccessful in achieving our strategic growth objectives; we might be harmed by large customer purchase reductions, payment defaults or contract non-renewal; our contracts with government entities involve future funding and compliance risks; we might be harmed by changes in our relationships or contracts with suppliers; our use of third-party data is subject to limitations that could impede the growth of our data services business; we might be adversely impacted by healthcare reform such as changes in pricing and reimbursement models; we might be adversely impacted by competition and industry consolidation; we might be adversely impacted by changes or disruptions in product supply and have difficulties in sourcing or selling products due to a variety of causes; we might be adversely impacted as a result of our distribution of generic pharmaceuticals; we might be adversely impacted by changes in the economic environments in which we operate, including from inflation, an economic slowdown, or a recession; changes affecting capital and credit markets might impede access to credit, increase borrowing costs, and disrupt banking services for us and our customers and suppliers and might impair the financial soundness of our customers and suppliers; we might be adversely impacted by changes in tax legislation or challenges to our tax positions; we might be adversely impacted by fluctuations in foreign currency exchange rates; we might be adversely impacted by events outside of our control, such as widespread public health issues, natural disasters, political events and other catastrophic events; and we may be adversely affected by global climate change or by legal, regulatory, or market responses to such change. About McKesson Corporation McKesson Corporation is a diversified healthcare services leader dedicated to advancing health outcomes for patients everywhere. Our teams partner with biopharma companies, care providers, pharmacies, manufacturers, governments, and others to deliver insights, products and services to help make quality care more accessible and affordable. Learn more about how McKesson is impacting virtually every aspect of healthcare at McKesson.com and read Our Stories. Tables and full-text of earnings release also available for viewing and download in PDF format: McKesson Reports Fiscal 2023 Fourth-Quarter Results (PDF, 456 KB) 1 See below under “Fiscal 2024 Outlook” for full explanation PR Contact Rachel Rodriguez David Matthews
2 Reflects continuing operations attributable to McKesson, net of tax
3 Adjusted results in this earnings release are non-GAAP financial measures; refer to the accompanying definitions and reconciliation schedules
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