McKesson(US:MCK)2025-11-05 22:33Financial Performance - Revenues for Q2 2025 reached $103,150 million, a 10.7% increase from $93,651 million in Q2 2024[9] - Net income attributable to McKesson Corporation for Q2 2025 was $1,110 million, compared to $241 million in Q2 2024, representing a significant increase of 360.6%[9] - Gross profit for the six months ended September 30, 2025, was $6,821 million, up from $6,400 million in the same period last year, reflecting a 6.6% growth[9] - Operating income for Q2 2025 was $1,407 million, a 142.6% increase from $578 million in Q2 2024[9] - Diluted earnings per share for Q2 2025 was $8.92, compared to $1.87 in Q2 2024, marking a 376.5% increase[9] - Comprehensive income for Q2 2025 was $1,100 million, compared to $264 million in Q2 2024, representing a 317.4% increase[11] - For the six months ended September 30, 2025, net income was $1,994 million, compared to $1,247 million for the same period in 2024, representing a 60% increase[20] Assets and Liabilities - Total assets as of September 30, 2025, were $84,160 million, up from $75,140 million as of March 31, 2025, indicating a growth of 12.5%[14] - Current liabilities increased to $68,031 million from $61,604 million, reflecting an increase of 10.4%[14] - Cash and cash equivalents decreased to $4,004 million from $5,691 million, a decline of 29.6%[14] - The company reported a decrease in cash, cash equivalents, and restricted cash of $1,847 million, ending the period with $4,004 million[20] - Total long-term debt increased to $7.76 billion as of September 30, 2025, up from $5.65 billion as of March 31, 2025[94] Dividends and Share Repurchases - The company declared cash dividends of $0.82 per common share for Q2 2025, compared to $0.71 per common share in Q2 2024[16] - Cash dividends declared were $1.53 per common share, totaling $192 million for the period[20] - The Company has authorized a share repurchase plan, with repurchases dependent on various factors including stock price and market conditions[158] - The total number of shares repurchased in Q1 2025 was 0.8 million at an average price of $709.84 per share, and in Q2 2025, 1.2 million shares were repurchased at an average price of $693.25 per share[161] - As of September 30, 2025, the approximate dollar value of shares that may yet be purchased under the repurchase program was $6,070 million[161] Acquisitions and Disposals - The Company acquired an 80% controlling interest in PRISM Vision for $871 million in cash, with a total estimated fair value of consideration at $912 million[35][39] - The Company acquired a 70% controlling interest in Core Ventures for $2.5 billion in cash, with a total estimated fair value of consideration at $3.181 billion[40][44] - The Company completed the sale of its Canadian retail disposal group for a total adjusted purchase price of $129 million, including a cash payment of $9 million and a note of $120 million[46] - The Company recorded net charges of $667 million for the Canadian retail disposal group to remeasure it to fair value less costs to sell[47] - The company entered into a definitive agreement to sell its Norwegian operations during the six months ended September 30, 2025, with the transaction subject to customary closing conditions[184] Segment Performance - The company operates in four reportable segments: North American Pharmaceutical, Oncology & Multispecialty, Prescription Technology Solutions, and Medical-Surgical Solutions[22] - North American Pharmaceutical segment revenue increased to $86,481 million for the three months ended September 30, 2025, up from $80,018 million in the same period of 2024, representing a growth of 5.8%[188] - Oncology & Multispecialty segment revenue rose to $12,044 million for the three months ended September 30, 2025, compared to $9,157 million in 2024, marking a significant increase of 31.0%[188] - Prescription Technology Solutions segment revenue was $1,376 million for the three months ended September 30, 2025, a slight increase from $1,265 million in the same period of 2024, reflecting a growth of 8.8%[188] - Medical-Surgical Solutions segment revenue remained stable at $2,947 million for the three months ended September 30, 2025, compared to $2,946 million in 2024[188] Legal and Regulatory Matters - The Company has paid approximately $2.5 billion as of September 30, 2025, under a settlement agreement with 48 states and will pay up to approximately $5.4 billion through 2038[138] - The estimated total litigation liabilities for opioid-related claims as of September 30, 2025, amount to $5.72 billion, down from $6.38 billion as of March 31, 2025[148] - The Company is vigorously defending itself against various claims and legal proceedings related to the distribution of controlled substances[136] - The Company has recorded a liability for opioid-related claims when a loss is probable and reasonably estimable, reflecting ongoing legal uncertainties[135] - The Company is establishing a clearinghouse to consolidate controlled-substance distribution data as part of its settlement efforts[138] Tax and Compliance - Income tax expense for the three months ended September 30, 2025, was $232 million, with a reported income tax rate of 16.6%, compared to $247 million and 46.3% for the same period in 2024[63][65] - The company recognized a discrete tax benefit of $119 million during the three months ended September 30, 2025, related to the release of a valuation allowance in a foreign jurisdiction[65] - The company had $1.6 billion of unrecognized tax benefits as of September 30, 2025, with $1.4 billion potentially reducing income tax expense if recognized[69] - The company maintains compliance with all covenants under its credit facilities as of September 30, 2025[102] Risk Management - The company is exposed to foreign currency exchange rate risks and utilizes foreign currency forward contracts and cross-currency swaps to mitigate these risks[105] - Interest rate risk is managed through the use of interest rate swaps and forward contracts to hedge fluctuations in benchmark interest rates[106] - The fair value of the company's long-term debt as of September 30, 2025, was $7.831 billion, compared to a carrying value of $7.758 billion[129] Other Comprehensive Income - The accumulated other comprehensive loss as of September 30, 2025, was $908 million, reflecting a decrease from $898 million as of June 30, 2025[166] - For the three months ended September 30, 2025, the company recorded other comprehensive income (loss) of $(10) million, including gains of $98 million related to net investment hedges[167]