McKesson Raises FY2027 Outlook as Q2 Adjusted EPS Rises 18%

McKesson Corporation (NYSE: MCK) raised its fiscal 2027 adjusted earnings outlook after second-quarter profit increased faster than revenue, supported by specialty pharmaceutical distribution, oncology and multispecialty services, prescription technology growth and share repurchases.

The healthcare distribution company now expects fiscal 2027 adjusted earnings of $45.60 to $46.40 per diluted share, up from its previous range of $44.20 to $45.00. The new forecast represents growth of 17% to 19% from fiscal 2026. McKesson also increased its revenue growth forecast to 6% to 10% from 5% to 9%, while its adjusted operating profit growth outlook rose to 12% to 16% from 9% to 13%.

For the quarter ended September 30, 2026, revenue increased 8% year over year to $111.0 billion. Adjusted operating profit rose 13% to $1.85 billion, while adjusted earnings advanced 11% to $1.36 billion. Adjusted earnings per diluted share climbed 18% to $11.68, helped by operating performance and capital allocation, including a 6% reduction in diluted weighted-average shares.

On a GAAP basis, net income attributable to McKesson increased 10% to $1.22 billion, and diluted earnings per share rose 17% to $10.44.

Specialty distribution and oncology lead growth

North American Pharmaceutical, McKesson’s largest segment, reported a 6% increase in quarterly revenue to $91.36 billion. Growth reflected higher prescription transaction volumes, including increased specialty-product volumes supplied to health systems and strategic accounts, partly offset by lower contributions from branded pharmaceuticals.

Adjusted operating profit for the segment rose 22% to $1.04 billion, and its adjusted margin expanded by 16 basis points to 1.14%. McKesson now expects the segment’s fiscal 2027 revenue to increase 5% to 9% and adjusted operating profit to grow 14% to 18%, both above its previous outlook ranges.

Oncology & Multispecialty revenue advanced 24% to $14.98 billion, driven by provider solutions and specialty distribution. Adjusted operating profit increased 8% to $427 million, although the adjusted margin fell 45 basis points to 2.85%. Excluding $51 million of prior-year net gains related to an equity investment sale and market decisions within The U.S. Oncology Network, segment adjusted operating profit grew 23%.

McKesson raised its full-year outlook for the Oncology & Multispecialty segment, forecasting revenue growth of 20% to 24% and adjusted operating profit growth of 18% to 22%. The company previously expected growth of 14.5% to 18.5% and 13.5% to 17.5%, respectively.

Prescription Technology Solutions generated $1.52 billion in revenue, up 10%, as prescription volumes increased in third-party logistics and access solutions. Lower contributions from hub dispensing services partially offset that growth. Adjusted operating profit rose 18% to $307 million on higher demand for access solutions, lifting the adjusted margin by 123 basis points to 20.20%.

Medical-Surgical Solutions revenue increased 5% to $3.10 billion as both extended and ambulatory care channels grew. However, adjusted operating profit declined 10% to $225 million, and the adjusted margin contracted by 118 basis points to 7.27%. McKesson attributed the profit decline to product mix in ambulatory care, partly offset by growth in extended care. The company now expects the segment’s fiscal 2027 adjusted operating profit to range from a 4% decline to flat, compared with its previous forecast of flat to 4% growth.

Cash flow, transactions and capital deployment

McKesson generated $3.07 billion of operating cash flow and $2.95 billion of non-GAAP free cash flow during the quarter. For the first six months of the fiscal year, free cash flow reached $2.58 billion, up 131% year over year.

The company expects fiscal 2027 free cash flow of $4.5 billion to $4.9 billion. It also plans approximately $5.0 billion of share repurchases during the year, of which $3.4 billion was completed in the first half. McKesson had $4.3 billion remaining under its repurchase authorization as of September 2026.

McKesson also extended its pharmaceutical distribution partnership with CVS Health through June 2032. On October 5, it agreed to invest approximately $1.4 billion for an approximately 49% minority interest in Option Care Health, subject to stockholder and regulatory approvals and other closing conditions.

On November 2, McKesson completed its acquisition of Precision Medicine Group, a provider of clinical research and biopharma commercialization services. The same day, PRISM Vision Group expanded its network through the addition of Spectrum Vision Partners, bringing in more than 150 providers.

Outlook and risks

In addition to its earnings and revenue forecasts, McKesson expects fiscal 2027 corporate expenses at the high end of its $580 million to $640 million range and interest expense at the high end of $380 million to $420 million. Its forecast for adjusted net income attributable to noncontrolling interests is $290 million to $320 million, while the expected effective tax rate remains 18% to 19%.

The outlook is provided only on a non-GAAP basis because McKesson said it cannot reasonably forecast several adjustments needed for a GAAP reconciliation, including LIFO inventory effects, litigation contingencies, transaction expenses, restructuring and impairment charges.

Key uncertainties include the planned separation of Medical-Surgical Solutions and the proposed Option Care Health investment, either of which may not close on the contemplated terms or timeline or deliver the intended benefits. McKesson also identified legal and regulatory exposure, including opioid-related matters, cybersecurity and information-system risks, supply disruptions, customer contract or credit issues, healthcare pricing and reimbursement changes, acquisition integration risks, competition and changing economic or capital-market conditions.