MCKESSON CORPORATION Reports Third Quarter Fiscal Year 2023 Earnings Results on February 1, 2023

Earnings Overview

On February 1, 2023, MCKESSON CORPORATION ($NYSE:MCK) released its earnings report for the third quarter of fiscal year 2023 (ending December 31, 2022). Total revenue had increased by 10900.0% year-over-year to USD 1.1 billion, and net income was up 2.7% at USD 70.5 billion.

Transcripts Simplified

McKesson Corporation reported solid performance in the fiscal third quarter of 2023, with strong growth across its North American segment, led by the U.S. Pharmaceutical and Medical-Surgical Solutions segments. As a result of its financial performance, the company increased and narrowed its full year outlook for fiscal 2023 adjusted earnings per diluted share to a range of $25.75 to $26.15. Consolidated revenues of $70.5 billion increased 3%, driven by growth in the U.S. Pharmaceutical segment, while gross profit decreased 10%.

Operating expenses decreased 14%, largely driven by completed European divestitures in the International segment. Operating profit was $1.4 billion, an increase of 9%, due to a pretax benefit of $126 million related to the early termination of a tax receivable agreement with Change Healthcare.

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Mckesson Corporation. More…

Cash Flow Snapshot

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Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Mckesson Corporation. More…

Key Ratios Snapshot

Some of the financial key ratios for Mckesson Corporation are shown below. More…

Share Price

The stock opened at $374.7 and closed at $371.0, down by 2.0% from its previous closing price of 378.7. This decline followed the announcement of the earnings results for the quarter, which missed analysts’ expectations. This was driven by higher prescription volumes, along with cost savings and operational efficiencies.

Overall, the company’s results were mixed, with weak revenue growth and a decline in net income that highlighted some underlying challenges faced by MCKESSON CORPORATION. Investors responded by selling off the company’s stock, resulting in a 2.0% decline in value from its opening price. Live Quote…

Analysis

At GoodWhale, we take pride in analyzing the fundamentals of companies to help investors make smart decisions. Recently, we conducted an analysis of MCKESSON CORPORATION and based on our findings, we believe it is a low risk investment. When evaluating the risk rating of a company, we look at a variety of factors including financial performance and business operations. In this case, the results indicate that MCKESSON CORPORATION is a relatively safe investment. Although the overall risk rating is low, we did detect two risk warnings in the income sheet and balance sheet that registered GoodWhale users can access. We value transparency and accuracy when assessing the risk of any investment and recommend that our users check out these warnings to make an informed decision. More…

Peers

In the healthcare sector, McKesson Corp competes against Cardinal Health Inc, AmerisourceBergen Corp, and Sigma Healthcare Ltd. These companies are all major players in the healthcare industry, and each one brings something unique to the table. However, McKesson Corp is the largest of these companies, and its size gives it a significant competitive advantage.

– Cardinal Health Inc ($NYSE:CAH)

Cardinal Health Inc is a healthcare services and products company that operates in two segments: Pharmaceutical and Medical. The company’s Pharmaceutical segment includes sales of branded, generic and over-the-counter pharmaceutical products, as well as nuclear pharmacy services. The Medical segment provides a range of medical products and services, including surgical and medical products, medical devices and laboratory products and services. Cardinal Health Inc has a market cap of 18.55B as of 2022. The company’s Return on Equity for the same period is 55.12%.

– AmerisourceBergen Corp ($NYSE:ABC)

AmerisourceBergen is one of the world’s largest pharmaceutical services companies. It offers a range of services and products to healthcare providers and pharmaceutical companies. The company has a market cap of 29.64B as of 2022 and a return on equity of 417.0%. AmerisourceBergen is a publicly traded company listed on the New York Stock Exchange.

– Sigma Healthcare Ltd ($ASX:SIG)

Sigma Healthcare is a leading full-line wholesale and distribution company that services pharmacies across Australia. The company has a market capitalisation of $693.83 million as of March 2022 and a return on equity of 0.46%. Sigma Healthcare is a diversified healthcare company with operations in both pharmacy and hospital sectors. The company’s primary activities include the wholesale distribution of pharmaceuticals, medical and surgical supplies. Sigma Healthcare also owns and operates a number of community pharmacies across Australia.

Summary

MCKESSON CORPORATION released its earnings report for the third quarter of fiscal year 2023, ending on December 31, 2022. Total revenue saw a massive 10900.0% growth year-over-year, reaching USD 1.1 billion while net income increased by 2.7%, amounting to USD 70.5 billion. Analysts are optimistic about the company’s growth trajectory and consider it to be a good long-term investment. MCKESSON CORPORATION has a strong balance sheet and is well poised for growth in the coming quarters given its current performance and positive outlook.