One of the world's largest healthcare companies, McKesson distributes branded, generic, specialty, and over-the-counter drugs to retail chains, community pharmacies, hospitals, and clinics across the U.S. and Canada, and supplies medical-surgical products to doctors' offices and other non-acute care settings. It began in 1833 in New York City as Olcott & McKesson, a drug import business founded by John McKesson and Charles Olcott, becoming McKesson & Robbins in 1853 when apprentice-turned-partner Daniel Robbins joined. Fun fact: the name "Robbins" comes from that early partner, and the company once made its own consumer medicines such as cough syrup and Epsom salts.
McKesson Q1 EPS fell 18% to $5.15 as a $371M rise in noncontrolling interest charges offset a 24% increase in pre-tax income.
A increase in income attributable to reshaped McKesson's this quarter. rose 8% to $105.4 billion and grew 12%, but fell 18% to $5.15 because a $371 million increase in net income allocated to noncontrolling interests more than offset a 24% rise in pre-tax income. The core pharmaceutical distribution business expanded, but the ownership structure of recent acquisitions is now a material swing factor for .
Key takeaways
fell 18% to $5.15 even as pre-tax income rose 24%, driven by a $371 million increase in attributable to , which reduced the portion of earnings available to McKesson shareholders.
rose 8% to $105.4 billion, led by market growth in the and higher specialty pharmaceutical volumes in the segment.
increased 12% to $3.7 billion and expanded 15 to 3.50%, reflecting volume growth across both the and segments.
Section summaries
Management's Discussion and Analysis
McKesson Q1 FY2027 revenue rose 8% to $105.4B on pharma volume growth, but EPS fell to $5.15 on higher noncontrolling interest charges.
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Consolidated grew 8% to $105.4B, driven by market growth in and higher specialty sales in .
fell 45% to $122 million, pressured by $45 million in charges tied to its planned separation into an independent company and a weaker contribution from ambulatory care.
was an outflow of $220 million, a $698 million improvement from the prior-year quarter, helped by a $1.8 billion increase in from vendor payment scheduling.
The company returned $2.6 billion to shareholders through $2.5 billion in share repurchases and $102 million in dividends, and the Board subsequently raised the quarterly to $0.94 per share.
What changed
The prior quarter's watch item on the separation progressed: the recorded $45 million in separation-related charges this quarter, contributing to a 45% decline in its to $122 million.
The $189 million Rite Aid provision recorded in Q1 FY2026 did not recur this quarter, removing a that had depressed earnings a year ago.
growth decelerated to 8% from 11% in the prior quarter, while expanded 15 to 3.50% after contracting 10 basis points in the full fiscal year, as volume growth in higher-margin specialty pharmaceuticals offset the mix impact of lower-margin retail national account volumes.
rose 25% to $9.7 billion, up from $6.5 billion in the prior-year quarter, reflecting the debt taken on to fund the and acquisitions that closed in early fiscal 2026.
remained negative and widened to -$3.9 billion from -$1.8 billion a year ago, driven by the increase in and ongoing share repurchases.
What to watch
Whether the $371 million increase in attributable to is a recurring quarterly run-rate tied to the and ownership structures, or a one-time allocation.
The pace and total cost of the separation, including whether the $45 million in quarterly charges scales up as the separation progresses toward becoming an independent company.
Q2 FY2027 after the $220 million Q1 outflow and whether the $1.8 billion increase reverses or represents a sustainable shift.
U.S. Pharmaceutical trajectory as antitrust settlement gains remain near zero and the Inflation Reduction Act's drug-price negotiation provisions take effect.
increased 12% to $3.7B with margin expanding 15 to 3.50%, reflecting volume growth in and .
attributable to McKesson fell 18% to $5.15, as a 24% rise in pre-tax income was more than offset by a $371M increase in attributable to .
declined 45% to $122M, impacted by $45M in charges related to its planned separation and a weaker ambulatory care contribution.
The company returned $2.6B to shareholders via $2.5B in share repurchases and $102M in dividends, and the Board subsequently raised the quarterly to $0.94 per share.
Operating cash use improved by $698M to an outflow of $220M, helped by a $1.8B increase in from vendor payment scheduling.
Quantitative and Qualitative Disclosures About Market Risk
We believe there has been no material change in our exposure to risks associated with fluctuations in interest and foreign currency exchange rates as disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026. 48 Table of Contents McKESSON CORPORATION
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We believe there has been no material change in our exposure to risks associated with fluctuations in interest and foreign currency exchange rates as disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026.
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McKESSON CORPORATION
The information set forth in Financial Note 11, “Commitments and Contingent Liabilities,” to the accompanying condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, and in Financial Note 17, “Commitments and Contingent Liabilities,” to the co…
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The information set forth in Financial Note 11, “Commitments and Contingent Liabilities,” to the accompanying condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, and in Financial Note 17, “Commitments and Contingent Liabilities,” to the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026, is incorporated herein by reference. Disclosure of an environmental proceeding with a governmental agency generally is included only if we expect monetary sanctions in the proceeding to exceed $1 million, unless otherwise material.
Other than factual updates discussed in this Quarterly Report on Form 10-Q, there have been no material changes for the period covered by this Quarterly Report on Form 10-Q to the risk factors disclosed in Part I of Item 1A of our Annual Report on Form 10-K for the fiscal year e…
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Other than factual updates discussed in this Quarterly Report on Form 10-Q, there have been no material changes for the period covered by this Quarterly Report on Form 10-Q to the risk factors disclosed in Part I of Item 1A of our Annual Report on Form 10-K for the fiscal year ended March 31, 2026.