McKesson Corp. reported double-digit growth in sales and profit in its fiscal third quarter as steady prescription demand, expansion in specialty distribution and strength in pharmacy technology services powered results across most of the company’s business.
For the quarter ending Dec. 31, McKesson reported sales of $106.2 billion, up from $95.3 billion a year earlier, an 11% increase.
Net income attributable to McKesson rose to $1.19 billion, compared with $879 million last year — a 35% gain.
For the first nine months of the fiscal year, sales reached $307.1 billion, up from $268.2 billion, a 15% increase. Year-to-date net income climbed to $3.08 billion from $2.04 billion, a 51% rise.
CEO Brian Tyler told analysts that prescription utilization remained stable throughout the pharmaceutical business, with particularly robust performance in specialty distribution and oncology care.
“We’ve seen pretty stable and consistent prescription volume in the pharma segment for several quarters,” Tyler said. “Specialty and oncology in particular have been strong.”
McKesson said growth was led by its North American pharmaceutical distribution unit, where higher volumes from large retail customers and health systems lifted results. Demand for specialty therapies — including GLP-1 medications — also contributed to the quarter’s performance.
The company said it distributed $10.9 billion in GLP-1 medications during the quarter, up about 45% from a year earlier. That demand also boosted McKesson’s Prescription Technology Solutions segment, where providers use the company’s systems for prior authorizations, reimbursement support, and patient access services.
McKesson’s U.S. Oncology Network continued to expand, now including more than 2,750 providers across 640 sites in 31 states. Same-site patient visits increased 6% during the quarter, and clinical trial participation through the company’s joint venture with Sarah Cannon Research Institute rose 25% over the past year.
One area of softness was the Medical-Surgical Solutions segment, where a milder-than-usual flu and respiratory season reduced demand for vaccines, testing supplies, and physician office products. Illness activity ran at about 62% of the average of the past five non-COVID seasons, executives said. McKesson said cost-reduction efforts in that business remain on track and are expected to deliver $100 million in savings this fiscal year.
During the quarter, McKesson signed an agreement to acquire an 80% stake in PRISM Vision, an ophthalmology and retina care provider with 180 clinicians, 91 offices and seven surgery centers. McKesson said it will pay about $850 million for the stake. The transaction is expected to add $0.20 to $0.30 per share to earnings in the first year after closing and up to $0.75 per share by year three, pending regulatory approval.
Executives said the deal reflects McKesson’s strategy of building specialty care networks supported by distribution, data, and clinical services.
McKesson also raised and narrowed its full-year earnings outlook, citing continued momentum in pharmaceutical distribution, oncology, and pharmacy technology services.
Chief Financial Officer Britt Vitalone said many of the same factors driving the third quarter are expected to continue into the next fiscal year.
“About 80% of the company’s operating profit is growing at double-digit rates,” Vitalone said. “We feel comfortable reaffirming our long-term earnings growth target.”
McKesson continued to reshape its portfolio during the quarter. The company completed the sale of its Rexall and Well.ca businesses in Canada and, on Jan. 30, closed the sale of its Norwegian retail and distribution operations, completing its planned exit from Europe. It is also preparing to separate its Medical-Surgical Solutions business into a standalone company.
Tyler said the results reflect how McKesson is evolving beyond traditional drug wholesaling into specialty care services and healthcare technology.
“The fundamentals of our business remain strong,” he said. “We’re building differentiated capabilities that create real value for providers, pharmacies and patients.”
Do not miss any content from Distribution Strategy Group. Join our list.
