McKesson Raises Full-Year Outlook on Strong Q3 Performance, Fueled by Oncology and GLP-1 Drug Distribution
IRVING, Texas – McKesson Corporation (NYSE: MCK) delivered a powerful performance in its fiscal third quarter, prompting management to raise and narrow its full-year earnings outlook. The healthcare services and distribution leader reported double-digit growth across key metrics, driven by sustained momentum in its oncology and biopharma services segments and robust prescription drug distribution in North America.
For the quarter, consolidated revenue reached $106.2 billion, an 11% increase year-over-year. Adjusted earnings per diluted share jumped 16% to $9.34. Bolstered by these results, the company now expects full-year adjusted EPS in the range of $38.80 to $39.20, implying a growth rate of 17% to 19%.
"Our results reflect the successful execution of our strategy and the underlying strength of our diversified platform," said CEO Brian Tyler. He highlighted particular strength in the Oncology and Multispecialty unit, where revenue surged 37% to $13 billion, aided by recent acquisitions and expanded provider networks.
A significant contributor to the North American Pharmaceutical segment, which saw revenue rise 9% to $88.3 billion, was the distribution of GLP-1 drugs used for diabetes and weight loss. CFO Britt Vitalone noted GLP-1 distribution revenue hit $14 billion for the quarter, a 26% year-over-year increase, underscoring the ongoing demand wave for these therapies.
The company also continues to benefit from operational efficiency initiatives. "We are seeing tangible productivity gains from targeted investments in automation and AI," Vitalone stated, pointing to a 138-basis-point improvement in operating expenses as a percentage of gross profit.
On the strategic front, McKesson confirmed it remains on track for the planned separation of its Medical-Surgical Solutions business via an IPO in the second half of 2027. The company also finalized its exit from the European market with the January divestiture of its Norway retail and distribution operations.
Looking ahead, management expressed confidence in navigating the current regulatory environment, including recent Medicare Part D changes. "We view the policy landscape as quite navigable," Tyler remarked, emphasizing the company's focus on supporting patient access to care.
Analyst & Investor Commentary:
"McKesson is executing flawlessly in high-growth niches like oncology and GLP-1 distribution while simultaneously improving margins through tech investments. The raised guidance is a clear signal of durable momentum." – David Chen, Portfolio Manager at Horizon Health Capital.
"These numbers are impressive, but let's not ignore the one-off gains. The $160 million credit from Rite Aid's bankruptcy and accounting boosts from divestitures paint a slightly rosier picture. The core Medical-Surgical segment is still struggling with a profit decline. The story isn't as uniformly strong as the headline suggests." – Anya Sharma, Senior Analyst at ClearSight Research, known for her critical takes.
"The strategic pruning of non-core assets (like Europe) and the focus on high-value services is a textbook case of portfolio optimization. The upcoming Med-Surg IPO could unlock significant value for shareholders." – Michael Roberts, Independent Healthcare Consultant.
"As a pharmacy owner, I see McKesson's tech investments firsthand. Their new AI tools for handling regulatory inquiries have drastically reduced back-office headaches for us, allowing more time for patient care." – Lisa Garcia, Owner of Garcia Family Pharmacy in Albuquerque.