McKesson Boosts FY23 Outlook Backed By Strong Contribution From COVID-19 Drugs

McKesson Corp MCK reported Q1 FY23 adjusted EPS of $5.83, +5% Y/Y, beating the consensus of $5.27.
Revenues increased 7% Y/Y to $67.15 billion, surpassing the consensus of $65.14 billion.
U.S. Pharmaceutical segment's revenues were $56.9 billion, +14%, driven by an increased volume of specialty products, including higher volumes from retail national account customers, and market growth, partially offset by branded to generic conversions.
Prescription Technology Solutions segment revenues increased 21% to $1.1 billion, driven by volume growth related to biopharma services.
Medical-Surgical Solutions revenues improved 3% to $2.6 billion, driven by growth in the primary care business, partially offset by lower sales of COVID-19 tests.
The company renewed its partnership with the U.S. government with the COVID-19 vaccine distribution contract extended through July 2023. The kitting, storage, and distribution of ancillary supplies contract have been extended through January 2023.
McKesson has settled or reached agreements to settle the opioid-related claims of all 50 states, the District of Columbia, and all eligible territories.
Outlook: McKesson raised the FY23 adjusted EPS forecast to $23.95 - $24.65 (consensus of $23.35), up from the previous guidance of $22.90 - $23.60
The updated outlook includes $0.35 - $0.45 related to the U.S. government's COVID-19 vaccine distribution, kitting, and storage programs; and $0.75 - $0.95 pertaining to COVID-19 tests.
Price Action: MCK shares closed at $327.10 on Wednesday.

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