McKesson NYSE: MCK raised its fiscal 2027 adjusted earnings outlook after reporting higher second-quarter revenue and profit, supported by prescription volumes, specialty distribution and demand for medication access services.
The company now expects adjusted earnings of $45.60 to $46.40 per diluted share for the fiscal year, up from its previous forecast of $44.20 to $45.00. The revised range implies growth of 17% to 19% from fiscal 2026.
Second-quarter revenue rose 8% year over year to $111 billion, while adjusted earnings per diluted share increased 18% to $11.68. Adjusted operating profit rose 13% to $1.9 billion, and the diluted weighted average share count declined 6% to 116.7 million, reflecting share repurchases.
“We delivered strong results through the first half of the year, including second quarter performance that exceeded our expectations,” Chief Financial Officer Kenny Cheung said.
Specialty distribution and GLP-1 volumes drive growth
North American Pharmaceutical revenue increased 6% to $91.4 billion, while operating profit rose 22% to $1 billion. Cheung attributed the profit growth to specialty distribution, including sales to health systems and strategic accounts.
Revenue from distributing GLP-1 medications reached $16 billion, up approximately $3 billion, or 26%, from a year earlier and 8% sequentially. Cheung said demand and volumes remained strong, although payer dynamics and patient utilization can cause quarterly variation.
Lower branded pharmaceutical pricing following wholesale acquisition cost decreases in January 2026 reduced year-over-year revenue growth in the segment by approximately 4%, Cheung said. He added that the pricing changes did not meaningfully affect segment operating profit.
McKesson expects full-year North American Pharmaceutical revenue growth of 5% to 9% and operating profit growth of 14% to 18%. Cheung said the outlook includes the company’s recently extended distribution relationship with CVS Health. The renewed term starts Oct. 1 and runs through June 2032.
Oncology & Multispecialty revenue increased 24% to $15 billion, and operating profit rose 8% to $427 million. Excluding $51 million in prior-year net gains within The US Oncology Network, operating profit increased 23%. Cheung said same-store patient visits across the company’s networks reached their highest level in recent quarters.
Prescription Technology Solutions revenue rose 10% to $1.5 billion, with operating profit up 18% to $307 million. The company cited demand for access solutions, including prior authorization services. In Medical-Surgical Solutions, revenue grew 5% to $3.1 billion, but operating profit fell 10% to $225 million, partly because of product mix in ambulatory care.
Acquisition and infusion investment
McKesson completed its acquisition of Precision Medicine Group for approximately $2.25 billion in cash. The business will report within Oncology & Multispecialty and add clinical research, market access and commercialization capabilities.
Cheung said the acquisition is expected to add $0.10 to $0.20 to adjusted earnings per share in fiscal 2027, with contributions weighted toward the fourth quarter. By the end of year three, McKesson estimates earnings accretion of approximately $1.60 to $1.80 per share.
Chair and Chief Executive Officer Brian Tyler said Precision Medicine Group’s clinical research capabilities complement McKesson’s oncology strategy, while its commercialization services broaden the company’s offerings to biopharmaceutical partners.
McKesson also agreed to invest approximately $1.4 billion for a 49% minority interest in home and alternate-site infusion provider Option Care Health. CD&R will own a majority interest at closing, and McKesson will be a non-operating partner.
The transaction is expected to close in the first half of calendar 2027, subject to shareholder and regulatory approvals and other customary conditions. Cheung said the current outlook excludes any contribution from Option Care Health. Tyler said McKesson expects to account for the investment under the equity method rather than include it in segment margin profiles.
Outlook and policy considerations
For fiscal 2027, McKesson expects revenue growth of 6% to 10%, operating profit growth of 12% to 16%, and free cash flow of $4.5 billion to $4.9 billion. It plans approximately $5 billion in share repurchases for the year, having bought back approximately $3.4 billion through the first half.
The revised earnings outlook implies growth of 19% to 21% when excluding the fiscal 2026 contribution from Norway and net gains within The US Oncology Network, Cheung said. That exceeds McKesson’s long-term adjusted earnings growth target of 13% to 16%.
During the question-and-answer session, executives addressed potential changes to the 340B drug pricing program. Tyler said it was difficult to predict how possible changes would be implemented or how customers might respond. Cheung said McKesson did not currently anticipate a material financial impact but would monitor developments closely.
About McKesson (NYSE:MCK)
McKesson Corporation is a healthcare services and information technology company that distributes pharmaceuticals and other medical products. Its customers include pharmacies, hospitals, health systems, clinics and other healthcare providers.
The company also provides medical-surgical supplies and technology and services that support pharmacy operations, prescription management and care delivery. Its offerings include specialized support for oncology and other areas of care.
Founded in 1833, McKesson serves customers primarily in the United States and Canada.
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