McKesson (NYSE:MCK) reported fiscal first-quarter 2027 results that exceeded its expectations, citing broad-based momentum across its operating businesses and prompting the healthcare services company to raise its full-year adjusted earnings outlook.
Revenue rose 8% to $105.4 billion, while adjusted diluted earnings per share increased 20% to $9.93. Chair and CEO Brian Tyler said three reporting segments posted double-digit operating-profit growth, supported by stable utilization, volume growth and the company’s portfolio of healthcare distribution, specialty and technology services.
Guidance raised as North American Pharmaceutical leads growth
McKesson raised its fiscal 2027 adjusted EPS outlook to a range of $44.20 to $45.00, from prior guidance of $43.80 to $44.60. The revised outlook implies adjusted EPS growth of 13% to 15%, excluding the impact of the Norway divestiture and a fiscal 2026 gain tied to the sale of an equity investment within The US Oncology Network.
The company expects fiscal-year revenue growth of 5% to 9% and operating-profit growth of 9% to 13%.
North American Pharmaceutical revenue increased 5% to $86.8 billion. The segment’s operating profit rose 19% to $894 million, driven by specialty distribution growth, including health systems and strategic accounts, as well as the timing of new product launches.
Chief Financial Officer Kenny Cheung said higher prescription volumes and specialty-product volumes supported revenue growth, partly offset by lower branded-drug pricing following wholesale acquisition cost reductions in January 2026 and branded-to-generic conversions. Cheung said branded pricing declines did not have a meaningful effect on operating profit because more than 95% of McKesson’s branded-drug business is fee-for-service.
GLP-1 medication distribution revenue totaled $15 billion during the quarter, up approximately $3 billion, or 24%, from the prior year. Revenue from GLP-1 products rose 13% sequentially. Tyler said the company continues to see growth in both the cash-pay and covered segments of the GLP-1 market.
For the full year, McKesson expects North American Pharmaceutical revenue growth of 4% to 8% and operating-profit growth at the high end of its previous 5.5% to 9.5% range. The company said its forecast includes accelerated investments during the second half of fiscal 2027, focused on growth and artificial intelligence, with returns expected to begin in fiscal 2028.
Oncology and technology businesses post double-digit profit gains
Oncology & Multispecialty revenue rose 33% to $14.2 billion, while operating profit climbed 41% to $405 million. Excluding contributions from the Core Ventures acquisition, completed in June 2025, segment revenue grew approximately 24% and operating profit increased about 15%.
Cheung attributed the results to expansion within existing provider solutions and specialty distribution, new business wins and the Core Ventures contribution. Tyler said Florida Cancer Specialists, which McKesson acquired through Core Ventures, has performed at the high end of the guidance range provided at the time of the acquisition.
The U.S. Oncology Network expanded to approximately 3,400 providers and treats more than 2 million patients annually, according to Tyler. McKesson also said PRISM Vision includes more than 200 providers across 97 locations. Its Sarah Cannon Research Institute joint venture participated in research contributing to 43 of the 52 adult oncology drugs approved by the FDA in 2025, the company said.
Prescription Technology Solutions revenue increased 9% to $1.6 billion, and operating profit rose 13% to $303 million. Results reflected higher prescription volumes in third-party logistics and access solutions, including prior authorization services. McKesson said it began supporting the CMS Medicare GLP-1 Bridge program in July, providing infrastructure for eligibility determination, electronic prior authorizations and pharmacy claims transactions.
The company said that once a prior authorization request is submitted to a payer, 95% receive a determination within 30 minutes.
Medical-Surgical separation advances under Wellverse brand
McKesson continued preparations to separate its Medical-Surgical Solutions business. Tyler said the unit will operate under the name Wellverse, with a phased transition expected to begin in January 2027.
During the quarter, McKesson completed Apollo Funds’ previously announced minority investment in the business. Apollo now holds approximately 13% of Medical-Surgical Solutions, while McKesson retains majority ownership and continues to consolidate the unit’s results.
The company also completed a $2.25 billion senior secured Term Loan B, following a $1 billion secured Term Loan A, and established a $1 billion revolving credit facility that remained undrawn during the quarter. Cheung said these financing arrangements support the business’s separation.
Medical-Surgical Solutions revenue increased 4% to $2.8 billion, aided by alternate-site-of-care growth and higher specialty pharmaceutical volumes. Operating profit declined 20% to $195 million due to product mix and a one-time administrative expense, partly offset by extended-care channel contributions.
Capital returns and policy considerations
McKesson ended the quarter with $5.2 billion in cash and cash equivalents and approximately $10 billion in total liquidity. Free cash flow was negative $372 million, including $152 million in capital expenditures, although trailing 12-month free cash flow totaled approximately $6.1 billion.
The company repurchased $2.5 billion of shares during the quarter, including $2.25 billion through an accelerated share repurchase program at an initial average price of about $755 per share. It returned $2.6 billion to shareholders through repurchases and dividends. In July, the board approved a 15% increase in the quarterly dividend, representing McKesson’s 10th consecutive annual increase.
Management expects approximately $4.5 billion to $4.9 billion in free cash flow and roughly $5 billion in share repurchases for fiscal 2027.
Tyler said McKesson is monitoring healthcare policy developments, including potential reforms to the 340B drug-pricing program and the Inflation Reduction Act’s Part B provisions. He said it would be premature to estimate financial effects from 340B proposals still under review, while noting the Part B program is not scheduled to take effect until January 2028.
About McKesson (NYSE:MCK)
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.
