McKesson Corporation

McKesson reported first-quarter fiscal 27 revenue of $105.4 billion, up 8% year over year, and adjusted earnings per diluted share of $9.93, up 20%. Gross profit was $3.7 billion, up 13%, and operating expenses were $2.1 billion, up 10%, with operating expenses as a percentage of gross profit improving by about 150 basis points year over year. Operating profit was $1.7 billion overall; North American Pharmaceuticals operating profit rose 19% to $894 million, Oncology and Multispecialty operating profit rose 41% to $405 million, Prescription Technology Solutions operating profit rose 13% to $303 million, and Medical Surgical Solutions operating profit fell 20% to $195 million. For the full year, McKesson raised adjusted EPS guidance to $44.20-$45, from $43.80-$44.60, and now expects fiscal 27 revenue growth of 5% to 9%, operating profit growth of 9% to 13%, free cash flow of approximately $4.5 billion to $4.9 billion, and roughly $5 billion of share repurchases. Segment guidance calls for North American Pharmaceutical revenue growth of 4% to 8% and operating profit growth at the high end of the prior 5.5% to 9.5% range; Oncology and Multispecialty revenue growth of 14.5% to 18.5% and operating profit growth of 13.5% to 17.5%; Prescription Technology Solutions revenue growth of 2.5% to 6.5% and operating profit growth of 11% to 15%; and Medical Surgical revenue growth of 1% to 6% and operating profit growth of flat to 4%.

Brian Tyler said the quarter showed broad-based momentum and disciplined execution, with strength across the enterprise, stable utilization, and volume growth supporting the results. He emphasized McKesson’s differentiated portfolio, its oncology and multispecialty strategy, and the company’s role in access, affordability, and community-based care. He also highlighted AI investments, portfolio actions around Medical Surgical, and said the company remains confident in sustained long-term growth.

Kenny Cheung focused on operating leverage, capital deployment, and the underlying drivers of the quarter. He cited revenue of $105.4 billion, gross profit of $3.7 billion, operating expenses of $2.1 billion, and operating profit of $1.7 billion, noting that operating expenses as a percentage of gross profit improved by about 150 basis points YoY. He also highlighted $5.2 billion in cash, approximately $10 billion of total liquidity, negative free cash flow of $372 million in Q1, trailing 12-month free cash flow of about $6.1 billion, $2.6 billion returned to shareholders in the quarter, a $2.5 billion share repurchase, and a 15% dividend increase approved in July.

Analysts focused on why North American Pharma outperformed, how repeatable that strength is, what drove the oncology and multispecialty surge, and whether GLP-1 demand remains durable amid coverage and direct-to-consumer dynamics. Management said North American Pharma benefited from higher prescription and specialty volume, with branded pricing declines having little operating profit impact, and said some generic favorability came earlier than expected. On oncology, management said growth reflected existing provider penetration, new business wins, and Core Ventures, while on GLP-1s they said demand remains strong in both cash-pay and covered segments and coverage has not shifted materially. Questions on policy centered on 340B and IRA Part B, and management said it was too early to quantify any financial impact from 340B changes.