McKesson (NYSE:MCK) Announces Earnings Results, Beats Estimates By $0.37 EPS

Key Points

• McKesson beat quarterly expectations: Revenue rose 8% to $105.38 billion, while adjusted EPS increased 20% to $9.93, exceeding analysts’ $9.56 estimate.
• Fiscal 2027 EPS guidance was raised to $44.20–$45.00 from $43.80–$44.60, supported by specialty growth, stable utilization and strong segment performance.
• Shareholder returns increased: McKesson raised its quarterly dividend 15% to $0.94 and plans approximately $5 billion in fiscal 2027 share repurchases, although Medical-Surgical Solutions profit declined 20%.

McKesson (NYSE:MCK - Get Free Report) announced its quarterly earnings data on Wednesday. The company reported $9.93 earnings per share (EPS) for the quarter, beating the consensus estimate of $9.56 by $0.37, FiscalAI reports. The firm had revenue of $105.38 billion for the quarter, compared to analysts' expectations of $103.88 billion. McKesson had a negative return on equity of 345.35% and a net margin of 1.18%. McKesson updated its FY 2027 guidance to 44.200-45.000 EPS.

Here are the key takeaways from McKesson's conference call:

• Strong first-quarter results: Revenue rose 8% to $105.4 billion, adjusted EPS increased 20% to $9.93, and operating profit grew 16%, with three segments delivering double-digit operating-profit growth.
• McKesson raised fiscal 2027 adjusted EPS guidance to $44.20-$45.00 from $43.80-$44.60, citing continued momentum, stable utilization, specialty growth, and confidence in execution.
• North American Pharmaceutical operating profit increased 19%, while Oncology & Multispecialty operating profit rose 41% and Prescription Technology Solutions grew 13%; GLP-1 distribution revenue also climbed 24% year over year to $15 billion.
• The company returned $2.6 billion to shareholders in the quarter, approved a 15% dividend increase, and plans approximately $5 billion of fiscal 2027 share repurchases.
• Medical-Surgical Solutions operating profit fell 20% to $195 million due to product mix and a one-time administrative expense, while the separation requires additional financing and is expected to generate $295 million-$325 million in annual noncontrolling-interest expense.

McKesson Price Performance

Shares of McKesson stock traded up $43.58 during trading on Wednesday, hitting $874.01. The stock had a trading volume of 1,142,514 shares, compared to its average volume of 947,883. The business has a fifty day moving average of $793.42 and a two-hundred day moving average of $840.32. McKesson has a fifty-two week low of $637.00 and a fifty-two week high of $999.00. The firm has a market cap of $102.33 billion, a P/E ratio of 22.72, a PEG ratio of 1.36 and a beta of 0.30.

McKesson Increases Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Thursday, October 1st. Stockholders of record on Tuesday, September 1st will be paid a $0.94 dividend. The ex-dividend date of this dividend is Tuesday, September 1st. This represents a $3.76 dividend on an annualized basis and a dividend yield of 0.4%. This is a boost from McKesson's previous quarterly dividend of $0.82. McKesson's dividend payout ratio (DPR) is presently 8.53%.

McKesson News Roundup

Here are the key news stories impacting McKesson this week:

• Positive Sentiment: Quarterly earnings beat expectations: McKesson reported fiscal first-quarter adjusted EPS of $9.93, above the $9.56 consensus estimate, while revenue of $105.38 billion exceeded expectations of $103.88 billion. The results point to resilient demand and operating performance. McKesson quarterly earnings report
• Positive Sentiment: Full-year EPS guidance raised: McKesson issued fiscal 2027 EPS guidance of $44.20 to $45.00, with a midpoint of $44.60—above the $44.27 analyst consensus. The improved outlook is likely the primary catalyst for investor optimism. McKesson fiscal 2027 first-quarter results
• Positive Sentiment: Value-oriented investor interest: Recent coverage identifies McKesson among healthcare stocks with long-term upside potential, which may attract investors seeking defensive exposure and relatively dependable earnings growth. Barron's healthcare stocks article
• Neutral Sentiment: Revenue outlook is broadly in line: Fiscal 2027 revenue guidance of $423.6 billion to $439.7 billion implies a midpoint of approximately $431.65 billion, slightly below the $431.9 billion consensus. This modest shortfall is offset by the stronger EPS outlook.
• Negative Sentiment: Thin margins remain a risk: McKesson reported a net margin of 1.18%, highlighting the low-margin nature of pharmaceutical distribution. Its reported negative return on equity may also remain a concern, although it is influenced by the company’s capital structure and shareholder-return activity.

Insider Buying and Selling at McKesson

In other news, CEO Brian S. Tyler sold 8,463 shares of the firm's stock in a transaction dated Tuesday, July 7th. The shares were sold at an average price of $793.56, for a total transaction of $6,715,898.28. Following the completion of the transaction, the chief executive officer owned 5,919 shares in the company, valued at approximately $4,697,081.64. This trade represents a 58.84% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CAO Napoleon B. Rutledge, Jr. sold 133 shares of the stock in a transaction that occurred on Friday, June 5th. The shares were sold at an average price of $764.00, for a total transaction of $101,612.00. Following the sale, the chief accounting officer directly owned 632 shares of the company's stock, valued at approximately $482,848. This represents a 17.39% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 28,748 shares of company stock valued at $22,262,035 over the last 90 days. Insiders own 0.06% of the company's stock.

Institutional Investors Weigh In On McKesson

A number of institutional investors and hedge funds have recently modified their holdings of MCK. Brighton Jones LLC raised its holdings in McKesson by 46.3% during the 4th quarter. Brighton Jones LLC now owns 2,523 shares of the company's stock worth $1,438,000 after buying an additional 798 shares during the period. Caxton Associates LLP purchased a new position in shares of McKesson in the first quarter worth approximately $233,000. Sivia Capital Partners LLC raised its holdings in shares of McKesson by 77.9% during the second quarter. Sivia Capital Partners LLC now owns 685 shares of the company's stock valued at $502,000 after acquiring an additional 300 shares during the period. Treasurer of the State of North Carolina lifted its position in shares of McKesson by 0.9% in the 2nd quarter. Treasurer of the State of North Carolina now owns 58,623 shares of the company's stock valued at $42,958,000 after acquiring an additional 508 shares in the last quarter. Finally, Osterweis Capital Management Inc. acquired a new position in McKesson in the 2nd quarter worth approximately $166,000. 85.07% of the stock is owned by institutional investors and hedge funds.

Analyst Ratings Changes

A number of equities analysts have commented on the stock. Weiss Ratings downgraded shares of McKesson from a "buy (b)" rating to a "buy (b-)" rating in a report on Tuesday, July 7th. Wall Street Zen downgraded shares of McKesson from a "buy" rating to a "hold" rating in a research report on Saturday, June 27th. Deutsche Bank Aktiengesellschaft restated a "buy" rating and issued a $875.00 target price on shares of McKesson in a research note on Friday, May 8th. Wells Fargo & Company reduced their price objective on McKesson from $925.00 to $812.00 and set an "equal weight" rating for the company in a research report on Tuesday, May 12th. Finally, Citigroup raised their target price on McKesson from $945.00 to $1,000.00 and gave the company a "buy" rating in a research note on Friday, July 24th. Fourteen analysts have rated the stock with a Buy rating and three have assigned a Hold rating to the stock. According to data from MarketBeat.com, McKesson has an average rating of "Moderate Buy" and an average target price of $962.67.

McKesson Company Profile

McKesson Corporation NYSE: MCK is a global healthcare services and distribution company that supplies pharmaceuticals, medical-surgical products and health care technology solutions. Founded in 1833 and headquartered in Irving, Texas, McKesson operates across the drug distribution and healthcare services value chain, connecting manufacturers, pharmacies, hospitals and health systems to help manage the movement of medicines and clinical supplies.

The company's core activities include pharmaceutical wholesale distribution and logistics, specialty pharmacy services, and the provision of medical-surgical supplies to acute and non-acute care providers.

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