
McKesson Beats in 3Q23, GLP-1 Drives Increased Pharma Segment Revenue and Increased Prescription Technology Solutions Due to Prior Authorization Service Demand
11-2-23 (by: Scott Gleason) McKesson Corporation has released its fiscal 2024 second-quarter results with total revenues of $77.2 billion, marking a 10% increase over the previous year. Analysts had been forecasting total revenue of $76.0 billion. The growth in revenues was primarily attributed to the U.S. Pharmaceutical segment, which experienced a boost in prescription volumes. This increase includes higher volumes from retail national account customers, specialty products, and GLP-1 medications which management stated experienced exceptionally strong growth. The company also saw increased demand for Pharma and Technology Solutions due to demand for prior authorization software to contain GLP-1 utilization. The company noted Rite-Aid’s recent bankruptcy announcement, who is a major purchaser of medications. Management noted they are working with Rite-Aid to continue to supply them and do not currently expect any impact on 2024 results.
U.S. Pharmaceutical Segment revenues were $69.8 billion, an increase of 16%, driven by increased prescription volumes, including higher volumes from retail national account customers, specialty products, and GLP-1 medications, partially offset by branded to generic conversions. Prescription Technology Solutions Segment revenues were $1.1 billion, an increase of 12%, driven by increased prescription volumes in our technology services and third-party logistics businesses. Medical-Surgical Solutions Segment revenues were $2.8 billion, flat to the prior year, driven by lower sales of COVID-19 tests and lower contribution from kitting, storage, and distribution of ancillary supplies for the U.S. government’s COVID-19 vaccine program. International Segment revenues were $3.5 billion, a decrease of 43%, driven by the divestitures of McKesson’s European businesses.
The company’s adjusted earnings per diluted share for the second quarter of fiscal 2024 reached $6.23, marking a 3% increase over the prior year. This growth was driven by strong performance in the Prescription Technology Solutions and U.S. Pharmaceutical segments. Analysts had forecasted adjusted EPS of $6.13.
The company raised its outlook for the remainder of fiscal 2024 and is now calling for fiscal 2024 adjusted earnings per diluted share of $26.80 to $27.40, up from the previous range of $26.55 to $27.35.