Financial Performance - Revenues for the three months ended December 31, 2024, increased to $95,294 million, up 17.5% from $80,898 million in the same period of 2023[11] - Gross profit for the nine months ended December 31, 2024, was $9,684 million, representing a 4.8% increase compared to $9,243 million in 2023[11] - Net income attributable to McKesson Corporation for the three months ended December 31, 2024, was $879 million, a 49.2% increase from $589 million in the same period of 2023[11] - Earnings per share (diluted) for the three months ended December 31, 2024, was $6.95, compared to $4.42 for the same period in 2023, reflecting a 57.2% increase[11] - Net income for the nine months ended December 31, 2024, was $2,175 million, a decrease of 6.7% compared to $2,330 million for the same period in 2023[22] - The net income attributable to McKesson Corporation for the nine months ended December 31, 2024, was $2.035 billion, a decrease of 8% from $2.211 billion in the prior year[200] Assets and Liabilities - Total assets as of December 31, 2024, were $71,081 million, an increase from $67,443 million as of March 31, 2024[16] - Current liabilities increased to $58,562 million as of December 31, 2024, compared to $52,357 million as of March 31, 2024[16] - Total McKesson Corporation stockholders' deficit increased to $3,084 million as of December 31, 2024, from $1,971 million as of March 31, 2024[16] - Total liabilities increased significantly, with short-term borrowings rising to $11,395 million in 2024 from $4,770 million in 2023[22] - Total long-term debt as of December 31, 2024, was $4.422 billion, down from $5.579 billion as of March 31, 2024[79] Cash Flow and Dividends - Cash and cash equivalents decreased to $1,131 million as of December 31, 2024, from $4,583 million as of March 31, 2024[16] - Cash dividends declared per common share increased to $2.04 in 2024 from $1.78 in 2023, totaling $263 million in dividends paid[20] - The company reported a net cash used in operating activities of $(1,663) million for the nine months ended December 31, 2024, compared to $167 million provided in 2023[22] - The Company declared cash dividends of $0.71 per common share for the three months ended December 31, 2024[18] Restructuring and Impairment - The Company anticipates total charges of $650 million to $700 million related to enterprise-wide restructuring initiatives aimed at modernizing technology services, with $245 million recorded for the nine months ended December 31, 2024[46] - Restructuring, impairment, and related charges for the nine months ended December 31, 2024 totaled $276 million, compared to $84 million for the same period in 2023[45] - The Company recorded $23 million in net charges for the three months ended December 31, 2024, related to restructuring and impairment[45] - The company incurred asset impairment charges of $83 million in 2024, compared to $28 million in 2023, indicating increased financial strain[22] Share Repurchases - The Company repurchased common stock amounting to $2,878 million in 2024, compared to $2,381 million in 2023[22] - The Company repurchased 1.5 million shares of common stock for $821 million at an average price of $537.48 per share during the three months ended December 31, 2024[152] - As of December 31, 2024, the total remaining authorization for share repurchases was $7.8 billion after a $4.0 billion increase approved in July 2024[156] Tax and Legal Matters - Income tax expense for the three months ended December 31, 2024, was $298 million, with a reported income tax rate of 24.3%[61] - The estimated liability for opioid-related claims was $6.4 billion as of December 31, 2024, with $775 million expected to be paid within the next twelve months[194] - The Company has paid approximately $2.0 billion as part of a settlement agreement related to opioid distribution claims as of December 31, 2024, with potential future payments of up to $5.9 billion through 2038[124] - The Company's estimated total litigation liabilities for opioid-related claims as of December 31, 2024, amount to $6.392 billion, down from $6.778 billion as of March 31, 2024[136] Segment Performance - U.S. Pharmaceutical segment revenues for the three months ended December 31, 2024 were $87,110 million, up from $73,023 million in the prior year, representing a 19% increase[174] - Prescription Technology Solutions segment revenues for the three months ended December 31, 2024 were $1,371 million, an increase from $1,205 million in the prior year, reflecting a 14% growth[174] - Medical-Surgical Solutions segment revenues for the three months ended December 31, 2024 were $2,949 million, slightly down from $3,031 million in the prior year[174] - International segment revenues for the three months ended December 31, 2024 were $3,860 million, compared to $3,639 million in the prior year, marking a 6% increase[174] Investments and Acquisitions - The Company announced an agreement to acquire an 80% interest in PRISM Vision Holdings for approximately $850 million, which will be reported within the U.S. Pharmaceutical segment[44] - McKesson entered into an agreement to acquire a 70% controlling interest in Core Ventures for approximately $2.49 billion, subject to regulatory clearance[200] Other Financial Metrics - The Company recorded a charge of $666 million for the nine months ended December 31, 2024 related to the remeasurement of the Canadian retail disposal group[187] - The Company completed the sale of its Canadian retail disposal group for an adjusted purchase price of $9 million in cash and a $120 million note[187] - McKesson's gross profit margin for the nine months ended December 31, 2024, was 3.61%, down from 3.97% in the prior year[200]

Core Insights - McKesson reported mixed financial results for Q3 of fiscal 2025, beating earnings expectations but slightly missing revenue targets [1][2] - The company achieved an adjusted EPS of $8.03, surpassing the projected $8.01, while revenue was $95.3 billion, below the estimated $96 billion [1][3] Financial Performance - Operating profit surged by 91% year-over-year, reaching $1.29 billion, driven by enhanced efficiency and cost controls [2][6] - Revenue for the U.S. Pharmaceutical segment was $87.1 billion, reflecting strong growth due to increased prescription volumes [6] - The Prescription Technology Solutions segment saw a 14% revenue increase to $1.4 billion, attributed to growth in third-party logistics and technology services [7] - The Medical-Surgical Solutions segment experienced a 3% revenue decline to $2.9 billion, linked to reduced seasonal vaccine and testing activities [8] - Net income rose by 49% year-over-year to $879 million [3] Business Overview - McKesson is a key player in the healthcare supply chain, focusing on the distribution of medical supplies and pharmaceutical products [4] - The company has been consolidating its operations by exiting some European markets to strengthen its core business in the U.S. and Canada [5] Strategic Developments - McKesson secured a controlling interest in PRISM Vision Holdings, expanding its specialty care offerings [9] - The company divested its Canadian retail businesses, including Rexall, to focus on core growth markets [9] - Despite strategic efforts, McKesson reported negative free cash flow of $2.2 billion in Q3 due to investments and share buybacks [9] Future Outlook - McKesson raised its fiscal 2025 adjusted EPS guidance to a range of $32.55 to $32.95, indicating confidence in its strategic initiatives [10] - The anticipated growth rate for the adjusted EPS is projected at 19% to 20% [10] - The company is expected to navigate competitive and regulatory pressures, with notable competitors like Cardinal Health posing challenges [11]

Exhibit 99.1 McKESSON CORPORATION REPORTS FISCAL 2025 THIRD QUARTER RESULTS AND RAISES FULL YEAR ADJUSTED EPS GUIDANCE IRVING, Texas, February 5, 2025 - McKesson Corporation (NYSE:MCK) today announced results for the third quarter ended December 31, 2024. Third Quarter Highlights: Fiscal 2025 Outlook: "McKesson reported strong third quarter operational results with broad-based Revenue growth of 18% and Adjusted Operating Profit growth of 16%. Our performance reflects the strength and momentum across the ent ...

McKesson Corporation (MCK) recently announced that it has signed a definitive agreement to acquire a controlling interest in PRISM Vision Holdings, LLC (PRISM Vision), a premier provider of general ophthalmology and retina management services, from Quad-C.McKesson is likely to purchase an 80% stake in  PRISM Vision Holdings for approximately $850 million, while physicians will continue to retain a 20% interest.Likely Trend of MCK Stock Following the NewsFollowing the announcement, shares of the company clos ...

McKesson Corporation (MCK) is scheduled to report third-quarter fiscal 2025 results on Feb. 5, after market close.The company delivered an earnings surprise of 2.61% in the last reported quarter. Its earnings beat estimates in three of the trailing four quarters and missed once, delivering an average surprise of 4.99%.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.McKesson’s revenue growth has been driven largely by the rapid adoption of GLP-1 weight loss drugs and sustained demand ...

Wall Street analysts forecast that McKesson (MCK) will report quarterly earnings of $8.11 per share in its upcoming release, pointing to a year-over-year increase of 4.8%. It is anticipated that revenues will amount to $95.46 billion, exhibiting an increase of 18% compared to the year-ago quarter.The current level reflects an upward revision of 1.5% in the consensus EPS estimate for the quarter over the past 30 days. This demonstrates how the analysts covering the stock have collectively reappraised their i ...

Stock Performance - McKesson's stock ended at $602 95, marking a -0 24% decline from the previous day's close [1] - Over the past month, McKesson's shares gained 5 9%, outperforming the Medical sector's 3 83% gain and the S&P 500's 0 81% gain [1] Earnings and Revenue Projections - McKesson is scheduled to release its earnings on February 5, 2025, with projected EPS of $8 19, a 5 81% increase from the same quarter last year [2] - Revenue for the upcoming quarter is projected at $95 46 billion, up 18% year-over-year [2] - For the entire year, earnings are forecasted at $32 72 per share, a 19 24% increase, and revenue at $358 91 billion, a 16 17% increase compared to the previous year [3] Analyst Estimates and Valuation - Recent adjustments to analyst estimates reflect short-term business dynamics, with positive changes indicating a favorable outlook on the company's profitability [4] - McKesson currently has a Zacks Rank of 3 (Hold), with the Zacks Consensus EPS estimate decreasing by 0 02% over the past month [6] - The company's Forward P/E ratio is 18 47, in line with the industry average [7] - McKesson's PEG ratio is 1 31, lower than the Medical - Dental Supplies industry average of 2 1 [8] Industry Context - The Medical - Dental Supplies industry, part of the Medical sector, has a Zacks Industry Rank of 137, placing it in the bottom 46% of over 250 industries [8] - The Zacks Industry Rank shows that the top 50% of industries outperform the bottom half by a factor of 2 to 1 [9]

Company Performance - McKesson's stock closed at $586.08, reflecting a -1.1% change from the previous day, underperforming the S&P 500's gain of 0.88% [1] - Over the past month, McKesson's stock has increased by 2.74%, while the Medical sector has seen a loss of 0.32% and the S&P 500 has gained 1.17% [1] Upcoming Earnings - McKesson's earnings report is anticipated on February 5, 2025, with projected earnings per share (EPS) of $8.28, indicating a 6.98% increase from the same quarter last year [2] - Revenue is expected to reach $95.46 billion, reflecting an 18% growth compared to the same quarter of the previous year [2] Fiscal Year Projections - For the entire fiscal year, earnings are projected at $32.73 per share and revenue at $358.91 billion, representing increases of +19.28% and +16.17% respectively from the prior year [3] Analyst Estimates - Recent changes to analyst estimates for McKesson are significant as they reflect the evolving business trends, with positive revisions indicating analysts' confidence in the company's performance [4] - The Zacks Rank system, which evaluates estimate changes, currently ranks McKesson at 3 (Hold) [6] Valuation Metrics - McKesson has a Forward P/E ratio of 18.11, which aligns with its industry's Forward P/E of 18.11, indicating no significant deviation [7] - The company holds a PEG ratio of 1.28, compared to the average PEG ratio of 2 for the Medical - Dental Supplies industry [8] Industry Context - The Medical - Dental Supplies industry, part of the Medical sector, has a Zacks Industry Rank of 150, placing it in the bottom 41% of over 250 industries [9]

Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on McKesson (MCK), and highlights the potential misalignment of interests between brokerage firms and retail investors [1][4]. Group 1: Brokerage Recommendations - McKesson has an average brokerage recommendation (ABR) of 1.38, indicating a consensus between Strong Buy and Buy, based on 16 brokerage firms [2]. - Out of the 16 recommendations, 13 are Strong Buy, accounting for 81.3% of all recommendations [2]. - Despite the positive ABR, relying solely on this information for investment decisions may not be advisable, as studies suggest brokerage recommendations often fail to guide investors effectively [4]. Group 2: Analyst Bias and Zacks Rank - Brokerage analysts tend to exhibit a strong positive bias in their ratings due to vested interests, with a ratio of five "Strong Buy" recommendations for every "Strong Sell" [5][9]. - The Zacks Rank, which is based on earnings estimate revisions, is presented as a more reliable indicator of near-term stock performance compared to ABR [7][10]. - The Zacks Rank is timely and reflects the latest earnings estimates, while ABR may not always be up-to-date [11]. Group 3: Current Earnings Estimates for McKesson - The Zacks Consensus Estimate for McKesson's earnings for the current year remains unchanged at $32.73, suggesting stable analyst views on the company's earnings prospects [12]. - The recent change in consensus estimates, along with other factors, has resulted in a Zacks Rank of 3 (Hold) for McKesson, indicating a cautious approach despite the positive ABR [13].

Core Insights - McKesson (MCK) has started 2025 positively, with a 4% stock increase in January, driven by optimism regarding its performance and strategic focus on oncology and biopharma services [1][9] - The company reported strong second-quarter fiscal 2025 results, with U.S. Pharmaceutical segment revenues soaring 23% year over year to $85.7 billion, largely due to the growth of GLP-1 medications [10] - McKesson's strategic initiatives, including investments in technology and divestitures, are expected to enhance operational efficiency and focus on high-margin areas [2][17] Financial Performance - The U.S. Pharmaceutical segment's adjusted operating profit increased 11% to $902 million, supported by rising prescription volumes and the expansion of oncology services [10] - The International segment reported revenues of $3.7 billion, up 7% year over year, driven by higher pharmaceutical distribution volumes in Canada [11] - The Medical-Surgical Solutions segment grew 4% to $2.9 billion, with increased specialty pharmaceutical volumes partially offsetting challenges [12] - Prescription Technology Solutions (RxTS) revenues grew 11% to $1.3 billion, with automated prior authorizations saving patients over $2 billion in the second quarter [13] Strategic Focus - McKesson's focus on oncology and biopharma services is a major growth driver, with the U.S. Oncology Network expanding to over 3,300 providers [18] - The company is leveraging its scale and operational efficiency to enhance medication access and affordability through RxTS [17] - Strategic divestitures, including the sale of Rexall and Well.ca, are aimed at streamlining operations and reallocating resources to high-margin segments [2][18] Market Position - McKesson's stock is trading at a forward P/E of 16.5X, lower than the Medical Dental Supplies industry's 17.53X, indicating a favorable valuation [17] - The Medical-Dental Supplies industry has outperformed the broader medical sector and the S&P 500 Index, suggesting rising growth potential [4] Challenges - McKesson faces regulatory uncertainties, inflationary pressures, and potential supply-chain disruptions, which could impact margins and market share [3] - The Medical-Surgical Solutions segment reported a 4% decline in adjusted operating profit due to reduced primary care demand as market conditions normalized post-COVID-19 [21] - Rising operational costs in the U.S. Pharmaceutical segment have partially offset gains from other areas, impacting overall performance [22][23]