McKesson reports Q4, full-year results
SAN FRANCISCO — McKesson reported on Thursday a modest lift in fourth quarter and full-year revenues as chairman and CEO John Hammergren emphasized the company’s “ongoing focus on delivering shareholder value.”
Fourth quarter revenues for the period ended March 31 increased 6 percent to $51.6 billion. Fiscal year revenues rose 5 percent to $208.4 billion.
Adjusted earnings per diluted share was $3.49, up 2 percent compared with the year-ago period. Full-year adjusted earnings were diluted share was $12.62, up 1 percent compared with the prior year, which includes a 31 cents per diluted share contribution to create a non-profit foundation.
For the full year, McKesson generated cash from operations of $4.3 billion and ended the year with cash and cash equivalents of $2.7 billion. During the year, McKesson repaid approximately $765 million in net long-term debt, paid $2.9 billion for acquisitions, repurchased approximately $1.7 billion of its common stock, invested $580 million internally and paid $262 million in dividends.
“While we realized significant charges in the fourth quarter reflecting challenging market conditions in Europe and Canada, I’m pleased with the fiscal 2018 performance across our other businesses. And the strength of our balance sheet and cash flow enabled us to make internal investments and acquisitions that will drive growth,” said Hammergren. “This strong financial position, combined with actions we are taking in relation to our recently announced multi-year strategic growth initiative, ensures McKesson’s ongoing focus on delivering shareholder value.”
The company’s North America pharmaceutical distribution and services segment reported revenues of $42.7 billion for the quarter, up 5 percent on both a reported basis and constant currency basis. For the full year, North America pharmaceutical distribution and services revenues were $174.2 billion, up 6 percent on both a reported and constant currency basis, compared with the prior year. Revenue growth for the quarter and the full year was driven primarily by market growth and acquisitions, partially offset by branded to generic conversions, the company stated.
The company noted that, following the retirement of the president of Distribution Solutions in January 2018 and an evaluation of its management and operating structure, it has revised its reportable segments commencing in the first quarter of fiscal 2019. McKesson’s new reportable segments are:
All remaining operating segments and business activities that are not significant enough to require reportable segment disclosure will be included in Other. Other primarily includes McKesson Canada, McKesson Prescription Technology Solutions and the company’s equity method investment in Change Healthcare.
Fiscal Year 2019 Outlook
McKesson expects adjusted earnings per diluted share of $13 to $13.80 for the fiscal year ending March 31, 2019.
“Our fiscal 2019 outlook represents mid- to high-single digit percentage growth year over year, reflecting a more stable market environment and effective capital allocation, while including the previously outlined headwinds in our European and Rexall businesses,” Hammergren said.
Fourth quarter revenues for the period ended March 31 increased 6 percent to $51.6 billion. Fiscal year revenues rose 5 percent to $208.4 billion.
Adjusted earnings per diluted share was $3.49, up 2 percent compared with the year-ago period. Full-year adjusted earnings were diluted share was $12.62, up 1 percent compared with the prior year, which includes a 31 cents per diluted share contribution to create a non-profit foundation.
For the full year, McKesson generated cash from operations of $4.3 billion and ended the year with cash and cash equivalents of $2.7 billion. During the year, McKesson repaid approximately $765 million in net long-term debt, paid $2.9 billion for acquisitions, repurchased approximately $1.7 billion of its common stock, invested $580 million internally and paid $262 million in dividends.
“While we realized significant charges in the fourth quarter reflecting challenging market conditions in Europe and Canada, I’m pleased with the fiscal 2018 performance across our other businesses. And the strength of our balance sheet and cash flow enabled us to make internal investments and acquisitions that will drive growth,” said Hammergren. “This strong financial position, combined with actions we are taking in relation to our recently announced multi-year strategic growth initiative, ensures McKesson’s ongoing focus on delivering shareholder value.”
The company’s North America pharmaceutical distribution and services segment reported revenues of $42.7 billion for the quarter, up 5 percent on both a reported basis and constant currency basis. For the full year, North America pharmaceutical distribution and services revenues were $174.2 billion, up 6 percent on both a reported and constant currency basis, compared with the prior year. Revenue growth for the quarter and the full year was driven primarily by market growth and acquisitions, partially offset by branded to generic conversions, the company stated.
The company noted that, following the retirement of the president of Distribution Solutions in January 2018 and an evaluation of its management and operating structure, it has revised its reportable segments commencing in the first quarter of fiscal 2019. McKesson’s new reportable segments are:
- U.S. Pharmaceutical and Specialty Solutions, which includes the U.S. Pharmaceutical and McKesson Specialty Health businesses;
- European Pharmaceutical Solutions; and
- Medical-Surgical Solutions.
All remaining operating segments and business activities that are not significant enough to require reportable segment disclosure will be included in Other. Other primarily includes McKesson Canada, McKesson Prescription Technology Solutions and the company’s equity method investment in Change Healthcare.
Fiscal Year 2019 Outlook
McKesson expects adjusted earnings per diluted share of $13 to $13.80 for the fiscal year ending March 31, 2019.
“Our fiscal 2019 outlook represents mid- to high-single digit percentage growth year over year, reflecting a more stable market environment and effective capital allocation, while including the previously outlined headwinds in our European and Rexall businesses,” Hammergren said.