McKesson Q3 Earnings Call Highlights

Core Insights - McKesson reported consolidated revenue of $106.2 billion, reflecting an 11% year-over-year growth, attributed to strong performance across various segments, including higher prescription volumes and contributions from recent acquisitions [1][3]. Financial Performance - The company achieved record quarterly revenue and adjusted operating profit, with double-digit growth in adjusted operating profit in Oncology, Multispecialty, and Biopharma Services [2][3]. - For fiscal 2026, McKesson raised its earnings per diluted share guidance to $38.80 to $39.20, indicating a year-over-year growth of 17% to 19% [2][3]. - Gross profit increased by 10% to $3.7 billion, while operating expenses rose by 7% to $2.1 billion, resulting in a 138 basis point improvement in operating expenses as a percentage of gross profit [6][7]. Segment Performance - Oncology and Multispecialty revenue surged by 37% to $13 billion, driven by provider growth and expanded specialty distribution [5][9]. - North American Pharmaceutical revenue reached $88.3 billion, up 9%, supported by higher prescription volumes [8]. - GLP-1 distribution revenue was $14 billion, marking a 26% increase year-over-year [5][8]. Cash Flow and Capital Deployment - McKesson generated $1.1 billion in free cash flow for the quarter and $9.6 billion for the trailing twelve months, attributed to strong operational performance [4][18]. - The company returned $781 million to shareholders during the quarter, including $680 million in share repurchases [4][19]. Strategic Initiatives - McKesson is progressing towards an IPO of its Medical-Surgical business by the second half of 2027 [4][13]. - The company completed the divestiture of its retail and distribution businesses in Norway, marking its exit from Europe [14]. - Investments in automation and AI-driven capabilities are enhancing operational efficiency and productivity [6][16]. Regulatory Environment - The company is actively managing the implications of the Inflation Reduction Act's Medicare Part D price changes, viewing the policy landscape as manageable [17].