McKesson(US:MCK)2025-08-06 21:30Financial Data and Key Metrics Changes - The company reported record consolidated revenues of $97.8 billion, an increase of 23% over the prior year [4] - Adjusted operating profit increased by 9% to $1.4 billion, with three segments delivering double-digit growth [5][27] - Gross profit was $3.3 billion, a 7% increase, driven by specialty distribution and provider growth [28] - Earnings per diluted share increased by 5% to $8.26, with a 14% increase when excluding gains from McKesson Ventures investments [33] Business Line Data and Key Metrics Changes - In the U.S. Pharmaceutical segment, revenues increased by 25% to $90 billion, driven by increased prescription volumes and growth in oncology and specialty products [35] - Prescription Technology Solutions segment revenues increased by 16% to $1.4 billion, with operating profit up 21% to $269 million [37] - Medical Surgical Solutions revenues were $2.7 billion, a 2% increase, with operating profit rising 22% to $244 million [38] - International segment revenues were $3.7 billion, a 1% increase, with operating profit down 3% to $99 million due to divestitures [38] Market Data and Key Metrics Changes - The company anticipates revenue growth of 11% to 15% and operating profit growth of 9% to 13% for fiscal 2026 [41] - The U.S. Pharmaceutical segment is expected to see revenue increases of 12% to 16% [42] - The Prescription Technology Solutions segment anticipates revenue growth of 8% to 12% [45] - The Medical Surgical Solutions segment expects revenue and operating profit growth of 2% to 6% [46] Company Strategy and Development Direction - The company is focused on oncology and biopharma services as strategic growth pillars, with recent acquisitions enhancing its capabilities [10][11] - A definitive agreement to sell the retail and distribution businesses in Norway marks the final phase of divesting European operations [21][25] - The company is investing in automation and technology to improve operational efficiency and productivity across its distribution network [30][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to sustain growth and deliver shareholder value despite market challenges [22][23] - The company remains engaged with policymakers to evaluate potential impacts on its business and customers [22] - Management highlighted the importance of community pharmacies and their role in the healthcare landscape [16][17] Other Important Information - The company plans to host an Investor Day on September 23 to provide updates on strategic priorities and business outlook [24] - The Board of Directors approved a 15% increase in the quarterly dividend, reflecting confidence in the company's strength [49] Q&A Session Summary Question: Impact of Norway sale on guidance - Management confirmed that the guidance increase is primarily tied to the sale of Norway and does not reflect changes in segment guidance for Medical or Rx Technology Solutions [108] Question: Core Pharma performance and Rite Aid impact - Management indicated that the impact of Rite Aid's bankruptcy on operations is immaterial and does not affect fiscal 2026 operations [58][59] Question: Biosimilar adoption and its impact - Management noted that recent biosimilar launches are contributing steadily to earnings, particularly in the Part B oncology channel [78][80] Question: Changes in pharmaceutical market dynamics - Management stated that brand pricing and generic pricing are in line with expectations, with no unusual impacts observed [72][73] Question: Operating expenses and automation initiatives - Management highlighted ongoing improvements in operating expense leverage due to automation and efficiency initiatives [84]