McKesson Lifts Full-Year Profit Outlook To $45.60-$46.40 A Share After 18% Jump In Quarterly Adjusted Earnings
The drug distributor raised its fiscal 2027 adjusted earnings guidance from $44.20 to $45.00 as second-quarter revenue rose 8% to $111.0 billion.
McKesson, the drug distributor, raised its full-year adjusted earnings forecast to $45.60 to $46.40 a share from $44.20 to $45.00, after second-quarter adjusted earnings of $11.68 a share climbed 18% on Wednesday's report. The new range implies 17% to 19% growth over the prior year, the company said.
Quarter beats last year on every line
Revenue for the quarter ended September 30 rose 8% to $111.0 billion, which the company tied to higher prescription volumes and specialty product distribution, partly offset by lower contributions from branded drugs. Earnings under standard accounting were $10.44 a share, up $1.52 from $8.92 a year earlier.
Adjusted earnings per share rose from $9.86. McKesson credited operational growth in its North American Pharmaceutical, Oncology & Multispecialty and Prescription Technology Solutions segments, plus a lower share count: diluted shares averaged 116.7 million against 124.4 million a year ago.
The company generated $3.1 billion of operating cash flow in the quarter and $2.9 billion of free cash flow. For the first six months of the fiscal year it returned $3.6 billion to shareholders, including $3.4 billion of stock repurchases and $198 million of dividends.
Oncology grows fastest, medical-surgical slips
North American Pharmaceutical, the largest segment, posted revenue of $91.4 billion, up 6%, helped by higher specialty volumes to health systems and strategic accounts. Its adjusted operating profit rose 22% to $1.0 billion.
Oncology & Multispecialty revenue climbed 24% to $15.0 billion, driven by provider solutions and specialty distribution; adjusted operating profit rose 8% to $427 million. Prescription Technology Solutions revenue rose 10% to $1.5 billion, with adjusted profit up 18% to $307 million.
Medical-Surgical Solutions was the soft spot. Revenue rose 5% to $3.1 billion, but adjusted operating profit fell 10% to $225 million on weaker ambulatory care results tied to product mix.
Deals reshaping the portfolio
McKesson distributes branded, generic, specialty and over-the-counter drugs to pharmacies, hospitals and physicians in the U.S. and Canada. On October 5 it signed a definitive agreement to invest about $1.4 billion for a minority stake of roughly 49% in Option Care Health, pending approval by Option Care stockholders and regulators.
On November 2 it completed its purchase of Precision Medicine Group, a clinical research and biopharma commercialization services provider. The company also agreed to extend its distribution partnership with CVS Health through June 2032.
CFO Kenny Cheung said the guidance raise is "underpinned by the strength in our business." Management is scheduled to appear at the Jefferies Global Healthcare Conference on November 17 and the Evercore Healthcare Conference on December 1.
The company held a conference call at 4:30 p.m. ET Wednesday to discuss the results.
Sources
- 8-K Filing — MCKESSON CORP (MCK) — SEC EDGAR
- Exhibit mck_exhibit991x9302026.htm — MCKESSON CORP 8-K exhibit — SEC EDGAR
- McKesson GAAP EPS of $10.47 beats by $0.23, revenue of $110.96B beats by $1.01B (MCK:NYSE) | Seeking Alpha — seekingalpha.com
- McKesson boosts full-year profit guidance as FQ2 results beat on both lines (MCK:NYSE) | Seeking Alpha — seekingalpha.com
- McKesson Raises Adjusted EPS View Again After 2Q Profit, Sales Rise — MarketWatch
- McKesson: Fiscal Q2 Earnings Snapshot | kare11.com — Associated Press
- McKesson Reports Fiscal 2027 Second Quarter Results and Raises Full Year Adjusted EPS Guidance — businesswire.com
