McKesson reported a 23% increase in revenue for its fiscal first quarter, reaching $97.8 billion, driven by higher prescription volumes and continued expansion in oncology and specialty drug distribution. The company also raised its full-year earnings guidance, citing strong operational performance across its business segments.
Despite the top-line growth, McKesson’s net income declined in the quarter due to fallout from Rite Aid’s bankruptcy.
“Our strong start to the fiscal year reflects continued momentum across the enterprise,” CEO Brian Tyler said on the company’s earnings call. “We’re seeing consistent growth in core distribution and specialty pharmaceuticals, and we’re expanding our capabilities in oncology and biopharma services.”
The U.S. pharmaceutical segment, McKesson’s largest, posted $90 billion in revenue, up 25% from a year earlier. The increase was attributed to higher prescription volumes from national retail chains and greater demand for specialty drugs. Adjusted operating profit in the segment rose 17%, helped by recent acquisitions.
In the first quarter, McKesson closed deals to acquire controlling stakes in two healthcare service providers: PRISM Vision Holdings, which focuses on retina and ophthalmology care, and Core Ventures, a business and administrative services firm tied to Florida Cancer Specialists. The latter move brought more than 250 oncology providers into McKesson’s U.S. oncology network, expanding its footprint to 3,300 providers across 30 states.
“These additions support our long-term strategy to grow our presence in high-acuity, community-based care,” Tyler said. “With providers using the same health record system, we’re also better positioned to deliver integrated services and use data more effectively.”
Prescription technology solutions, which helps coordinate access and payment for medications, grew 16% to $1.4 billion in revenue. The segment benefited from increased demand for services such as electronic prior authorizations, which help patients get needed medications faster. Medical-surgical dolutions rose 2% to $2.7 billion, while McKesson’s international segment saw flat growth at $3.7 billion.
The company spent $3.4 billion on acquisitions during the quarter.
McKesson used $918 million in cash from operations during the quarter and reported negative free cash flow of $1.1 billion, reflecting the scale of its investment activity.
The company also confirmed it has entered a definitive agreement to sell its retail and distribution business in Norway, the last of its European operations.
Executives said the company remains focused on simplifying its portfolio. A planned spin-off of the medical-surgical unit is still underway, and more details are expected at its upcoming investor day in September.
“We’re moving forward with clear priorities,” Tyler said. “We’re investing in our distribution network, growing our specialty business, and preparing the company for long-term structural change.”
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