McKesson (NYSE:MCK) Posts Earnings Results, Beats Expectations By $0.37 EPS

McKesson (NYSE:MCK) posted its quarterly earnings results on Wednesday. The company reported $9.93 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $9.56 by $0.37, FiscalAI reports. McKesson had a net margin of 1.18% and a negative return on equity of 345.35%. The business had revenue of $105.38 billion during the quarter, compared to analyst estimates of $103.88 billion. During the same period in the prior year, the firm earned $8.26 earnings per share. The firm’s revenue was up 7.7% compared to the same quarter last year. 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 Stock Down 0.9%

McKesson stock traded down $7.92 during midday trading on Thursday, hitting $869.31. 1,160,874 shares of the stock were exchanged, compared to its average volume of 949,205. The stock has a market capitalization of $101.78 billion, a PE ratio of 22.57, a P/E/G ratio of 1.37 and a beta of 0.30. The company has a fifty day simple moving average of $795.78 and a two-hundred day simple moving average of $840.54. McKesson has a 52 week low of $637.00 and a 52 week high of $999.00.

McKesson Increases Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, October 1st. Investors of record on Tuesday, September 1st will be issued a $0.94 dividend. This is a boost from McKesson’s previous quarterly dividend of $0.82. This represents a $3.76 dividend on an annualized basis and a yield of 0.4%. The ex-dividend date is Tuesday, September 1st. McKesson’s dividend payout ratio is currently 9.77%.

Key Headlines Impacting McKesson

Here are the key news stories impacting McKesson this week:

• Positive Sentiment: McKesson reported adjusted earnings of $9.93 per share, above the roughly $9.56 consensus, while revenue rose 7.7% year over year to $105.38 billion, also exceeding estimates. McKesson 1Q Revenue Rises 8%; Lifts Adj EPS Outlook
• Positive Sentiment: Strength in specialty pharmaceuticals and oncology helped drive results, with pharmaceutical profit reportedly increasing 19%. Management raised fiscal 2027 adjusted EPS guidance to $44.20-$45.00 and plans approximately $5 billion in share repurchases; the company also raised its dividend by 15%. McKesson outlines fiscal 2027 adjusted EPS guidance
• Neutral Sentiment: McKesson is rebranding its Medical-Surgical Solutions business as Wellverse ahead of a planned spin-off and IPO. The unit will retain its local headquarters, but the separation introduces execution and strategic-transition considerations. McKesson’s IPO-bound spin-off to rebrand as Wellverse
• Negative Sentiment: The EPS outlook midpoint is only modestly above the approximately $44.27 analyst consensus, while McKesson’s thin net margin leaves results sensitive to mix, pricing and operating costs. The positive earnings news may also have prompted profit-taking after the stock’s substantial prior run.

Wall Street Analyst Weigh In

A number of equities analysts have recently weighed in on the stock. Evercore reaffirmed an “outperform” rating on shares of McKesson in a research note on Thursday. Weiss Ratings downgraded shares of McKesson from a “buy (b)” rating to a “buy (b-)” rating in a report on Tuesday, July 7th. William Blair initiated coverage on shares of McKesson in a research report on Tuesday, April 28th. They issued an “outperform” rating on the stock. Robert W. Baird set a $1,015.00 price objective on McKesson in a research note on Thursday. Finally, JPMorgan Chase & Co. reduced their target price on shares of McKesson from $1,107.00 to $1,015.00 and set an “overweight” rating on the stock in a research note on Friday, May 8th. Fourteen analysts have rated the stock with a Buy rating and three have given a Hold rating to the stock. According to data from MarketBeat, the company has an average rating of “Moderate Buy” and an average price target of $965.80.

Insider Activity

In other McKesson news, EVP Michele Lau sold 3,550 shares of the stock in a transaction dated Tuesday, May 26th. The stock was sold at an average price of $761.09, for a total value of $2,701,869.50. Following the completion of the sale, the executive vice president directly owned 3,247 shares in the company, valued at $2,471,259.23. This represents a 52.23% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Brian S. Tyler sold 8,463 shares of the business’s stock in a transaction that occurred on Tuesday, July 7th. The shares were sold at an average price of $793.56, for a total value of $6,715,898.28. Following the completion of the transaction, the chief executive officer owned 5,919 shares of the company’s stock, valued at $4,697,081.64. This represents a 58.84% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 28,748 shares of company stock worth $22,262,035 over the last quarter. Corporate insiders own 0.06% of the company’s stock.

Hedge Funds Weigh In On McKesson

A number of institutional investors and hedge funds have recently added to or reduced their stakes in the stock. IHT Wealth Management LLC increased its stake in McKesson by 0.9% in the 4th quarter. IHT Wealth Management LLC now owns 1,196 shares of the company’s stock valued at $981,000 after buying an additional 11 shares during the last quarter. River Wealth Advisors LLC boosted its stake in shares of McKesson by 0.9% in the 4th quarter. River Wealth Advisors LLC now owns 1,383 shares of the company’s stock worth $1,134,000 after buying an additional 13 shares during the last quarter. DF Dent & Co. Inc. grew its holdings in shares of McKesson by 1.1% in the fourth quarter. DF Dent & Co. Inc. now owns 1,238 shares of the company’s stock valued at $1,016,000 after acquiring an additional 14 shares in the last quarter. Bey Douglas LLC grew its holdings in shares of McKesson by 0.3% in the fourth quarter. Bey Douglas LLC now owns 5,833 shares of the company’s stock valued at $4,785,000 after acquiring an additional 15 shares in the last quarter. Finally, Cynosure Group LLC increased its position in shares of McKesson by 2.9% during the fourth quarter. Cynosure Group LLC now owns 568 shares of the company’s stock valued at $466,000 after acquiring an additional 16 shares during the last quarter. 85.07% of the stock is owned by institutional investors and hedge funds.

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.