McKesson sees revenue gains in Q3
McKesson’s third quarter delivered solid results that led the company to reaffirm its earnings guidance for the year. Total revenue for the quarter was $59.2 billion, an increase of 5% over the prior-year period.
Earnings per diluted share decreased 56% to $1.06, while adjusted earnings per diluted share was $3.81, an increase of 12%.
“We delivered solid operating performance and we are pleased to report third-quarter adjusted earnings results ahead of our expectations,” said McKesson CEO Brian Tyler. McKesson’s unwavering focus on strategic and operational execution is demonstrated in the adjusted operating profit growth we reported in the third quarter across our core operating segments. Additionally, we have deployed meaningful capital toward share repurchases year-to-date, delivering further value to our shareholders. Our outlook for fiscal 2020 Adjusted EPS remains unchanged from the prior guidance we provided on Jan. 13, 2020.”
The company attributed the revenue growth primarily to the U.S. pharmaceutical and specialty solutions segment, largely due to branded pharmaceutical price increases and higher volumes from retail national account customers.
Third-quarter earnings per diluted share of $1.06 included a pre- and post-tax charge of $282 million within the company’s European Pharmaceutical Solutions segment for the remeasurement to fair value of assets and liabilities held for sale related to the expected formation of a new German wholesale joint venture with Walgreens Boots Alliance.
Third-quarter adjusted EPS was $3.81 compared to $3.40 a year ago, an increase of 12%, which the company said was primarily driven by growth in the U.S. pharmaceutical and specialty solutions, medical-surgical and European segments and a lower share count, partially offset by the previously anticipated increase in corporate expenses and a higher tax rate.
The company’s pharmaceutical and specialty solutions segment saw revenue up 6% over Q3 2019, totaling $46.9 billion. The company said the increase was driven primarily by branded pharmaceutical price increases and higher volumes from retail national account customers, partially offset by branded to generic conversions.
The company’s medical-surgical solutions segment saw revenue up 6% over Q3 2019, totaling $2.1 billion. McKesson said the increase was driven primarily by growth in the primary care business, largely due to higher pharmaceutical volumes and an early start to the influenza season.
As a result of a strong quarter, the company reaffirmed its guidance for the full-year 2020 adjusted earnings guidance range of $14.60 to $14.80, which was previously narrowed and raised from $14 to $14.60 on Jan. 13.