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Introduction & Market Context
McKesson Corporation (NYSE:MCK) presented its first quarter fiscal 2026 results on August 6, 2025, showcasing robust revenue growth and strategic investments aimed at strengthening its market position. The healthcare services and technology company reported significant growth across its business segments, particularly in its core U.S. Pharmaceutical (TADAWUL:2070) division, while continuing to deploy capital toward strategic acquisitions and shareholder returns.
Despite the strong quarterly performance, McKesson’s stock closed at $709.49, down 0.81% on the day of the presentation, according to market data. The company’s shares have performed well over the past year, trading near their 52-week high of $737.89, reflecting investor confidence in McKesson’s long-term strategy and execution.
Quarterly Performance Highlights
McKesson reported consolidated revenues of $97.8 billion for Q1 fiscal 2026, representing a substantial 23% increase compared to the same period last year. Adjusted earnings per diluted share grew 5% to $8.26, while GAAP earnings per diluted share decreased to $6.25.
As shown in the following summary of Q1 fiscal 2026 results:
The company’s performance was driven by increased prescription volumes from retail national account customers and growth in the distribution of oncology and specialty products. Based on this strong start to the fiscal year, McKesson raised its fiscal 2026 adjusted earnings per diluted share outlook to a range of $37.10 to $37.90, up from the previous guidance of $36.90 to $37.70.
The company also announced a 15% increase in its quarterly dividend to $0.82 per share, marking the ninth consecutive year of dividend increases, underscoring management’s confidence in McKesson’s financial strength and future prospects.
A detailed breakdown of the company’s financial performance shows growth across most key metrics:
The waterfall chart below illustrates the key drivers behind McKesson’s adjusted earnings per share growth, with operating performance contributing a significant $1.29 per share, partially offset by negative impacts from McKesson Ventures and tax rate changes:
Segment Performance Analysis
McKesson’s U.S. Pharmaceutical segment, which accounts for the largest portion of the company’s revenue, delivered exceptional growth with revenues increasing 25% to $89.95 billion. The segment’s adjusted operating profit rose 17% to $950 million, driven by increased prescription volumes and growth in specialty products distribution.
The Prescription Technology Solutions segment also performed strongly, with revenues increasing 16% to $1.43 billion and adjusted operating profit growing 21% to $269 million. This growth was attributed to higher prescription volumes in third-party logistics and technology services businesses, as well as increased demand for access solutions.
Medical-Surgical Solutions reported more modest revenue growth of 2% to $2.7 billion, but achieved impressive adjusted operating profit growth of 22% to $244 million. This profit improvement was primarily driven by operational efficiencies from cost optimization initiatives.
The International segment faced challenges, with revenues increasing only 1% to $3.74 billion and adjusted operating profit declining 3% to $99 million. This performance reflects the impact of divestitures, including the Canada-based Rexall and Well.ca retail businesses, partially offset by higher pharmaceutical distribution volumes in the Canadian business.
Capital Deployment and Strategic Initiatives
McKesson continued to execute its strategic capital allocation plan during the quarter, focusing on both organic growth and targeted acquisitions. The company completed the acquisitions of PRISM Vision Holdings and Core Ventures, while also entering into a definitive agreement to sell its retail and distribution businesses in Norway, aligning with its strategy to focus on core North American operations and specialty areas.
The following chart illustrates McKesson’s capital deployment during the quarter:
The company deployed $3.36 billion for M&A activities, while also returning value to shareholders through $581 million in share repurchases and $90 million in dividends. Despite these significant investments, McKesson maintained a solid cash position of $2.42 billion at the end of the quarter.
McKesson’s strategic focus remains centered on four key pillars as outlined in their enterprise growth strategy:
This framework guides the company’s investments and operational priorities, with particular emphasis on strengthening North American distribution and enhancing oncology and biopharma platforms.
Forward-Looking Statements
Looking ahead, McKesson provided an optimistic outlook for fiscal 2026, projecting 11-15% revenue growth and 9-13% adjusted operating profit growth. The company expects adjusted earnings per diluted share to grow 12-15% compared to the prior year, or 14-17% excluding net gains associated with McKesson Ventures’ equity investments.
The components driving McKesson’s fiscal 2026 adjusted EPS outlook are illustrated in the following waterfall chart:
For fiscal 2026, McKesson anticipates approximately $2.5 billion in share repurchases and plans to continue investing in accelerating the growth of its oncology, specialty, and biopharma services platforms. The company’s segment outlook shows particularly strong growth projections for U.S. Pharmaceutical, with revenue expected to increase 12-16% and adjusted operating profit growth at the high end of the 12-16% range.
McKesson’s presentation demonstrates the company’s continued momentum and strategic execution following its strong performance in fiscal 2025, when it reported 16% revenue growth and 20% year-over-year EPS growth. With its focus on operational excellence, strategic acquisitions, and capital returns to shareholders, McKesson appears well-positioned to deliver on its long-term growth targets in the evolving healthcare landscape.
Full presentation:
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