McKesson (NYSE:MCK) reported what executives described as another “strong quarter of results” for its fiscal third quarter of 2026, citing double-digit growth in revenue and adjusted earnings per share and continued momentum across oncology, biopharma services, and North American pharmaceutical distribution. Management raised and narrowed full-year guidance, pointing to stable utilization trends, strong specialty distribution, and operational efficiency initiatives that are improving productivity across the enterprise.
Quarter highlights and updated full-year outlook
CEO Brian Tyler said revenue and adjusted EPS both grew double digits in the quarter, driven by continued momentum across oncology, Biopharma Services, and North American distribution. Based on the quarter’s performance, McKesson raised full-year earnings per diluted share guidance to $38.80 to $39.20, which the company said implies 17% to 19% year-over-year growth.
- Revenue growth: 12% to 16%
- Operating profit growth: 13% to 17%
- EPS: $38.80 to $39.20
- Free cash flow: approximately $4.4 billion to $4.8 billion
Consolidated results: revenue up 11% to $106.2 billion
McKesson reported consolidated revenue of $106.2 billion, up 11% year over year. Vitalone attributed the growth to broad-based performance, including higher prescription volumes from retail national account customers in North American Pharmaceutical, continued momentum in Oncology and Multispecialty, expanded distribution of Oncology and Multispecialty products, and meaningful contributions from recent acquisitions.
Gross profit was $3.7 billion, up 10%, while operating expenses increased 7% to $2.1 billion. The company reported a 138 basis point improvement in operating expenses as a percentage of gross profit compared with the prior year, which Vitalone said reflected strong operational execution and enhanced efficiency alongside targeted investments in automation and AI-driven capabilities.
Operating profit rose 13% to $1.7 billion. Interest expense was $59 million, down 5%, and the effective tax rate was 23% compared with 23.9% in the prior-year quarter. Diluted weighted average shares outstanding were 123.7 million, down 2% due to share repurchases. Earnings per diluted share increased 16% to $9.34, which management said reflected strong operational performance and acquisition contributions in Oncology and Multispecialty.
Segment performance: GLP-1 growth, oncology platform expansion, and access solutions demand
North American Pharmaceutical revenue was $88.3 billion, up 9%, driven by higher prescription volumes and continued specialty distribution strength. Vitalone noted GLP-1 distribution revenue of $14 billion in the quarter, up $3 billion or 26% year over year, with 7% sequential GLP-1 revenue growth. Segment operating profit increased 6% to $872 million, benefiting from growth in specialty product distribution, including to health systems. Vitalone also reminded investors that prior-year results included a benefit tied to held-for-sale accounting related to the sale of Rexall and Well.ca, which had an approximate 3% impact on year-over-year segment growth.
Oncology and Multispecialty revenue increased 37% to $13 billion, driven by provider growth, expanded specialty distribution, and acquisitions completed during the fiscal year. Vitalone said the acquisitions of PRISM and Core Ventures contributed approximately 13% to segment revenue growth in the quarter. Operating profit rose 57% to $366 million, led by growth in provider solutions and specialty distribution, including acquisition contributions. Excluding the impact from acquisitions, organic operating profit increased 15%, according to management.
Prescription Technology Solutions revenue grew 9% to $1.5 billion, supported by higher prescription volumes across third-party logistics and technology services. Operating profit increased 18% to $277 million, driven by demand for access solutions including prior authorization services. Tyler said the company added over 50 new programs across 43 unique brands during the quarter, and management emphasized continued investment in modernizing services and building next-generation patient access and affordability solutions, including efforts to simplify electronic patient enrollment and accelerate authorization workflows.
Medical-Surgical Solutions revenue was $3 billion, up 1%, driven by higher specialty pharmaceutical volumes. Operating profit declined 10% to $265 million, which Vitalone said reflected lower volumes across physician office settings and lower incidence of seasonal illness.
Portfolio actions, regulatory backdrop, and technology initiatives
Management provided updates on several portfolio and regulatory items. Tyler said the company continues to progress in its planned separation of the Medical-Surgical business, noting that transition service agreements were put in place across the enterprise on January 1. The company reiterated that it remains on track for an IPO by the second half of calendar 2027, subject to market conditions and customary approvals.
Vitalone also highlighted that on January 30 the company completed the divestiture of its retail and distribution businesses in Norway, marking the final step in McKesson’s exit from Europe. She said held-for-sale accounting for Norway contributed $0.05 to adjusted EPS in the quarter, and that for fiscal 2026 the Norwegian businesses were expected to contribute approximately $1 billion of revenue and approximately $70 million of adjusted operating profit, inclusive of about $0.10 of adjusted EPS accretion due to held-for-sale accounting.
Additionally, Vitalone said McKesson recorded a gain-only pre-tax credit of $160 million (or $118 million after tax) within North American Pharmaceutical related to the bankruptcy of Rite Aid.
On technology and automation, Tyler and Vitalone described workflow and productivity gains in the Prescription Technology Solutions segment, including automation that helped employees support more patients during annual verification season. Tyler also cited an AI chat tool launched in November to handle customer inquiries related to the Drug Supply Chain Security Act, saying it prevented 75% of inquiries from being escalated. Vitalone said the segment’s operating margin expanded by more than 130 basis points year over year, and she linked continued margin opportunity to further automation of services for biopharma partners.
On the regulatory environment, Tyler said the Inflation Reduction Act’s planned Medicare Part D price changes went into effect in January and that McKesson worked closely with manufacturer partners to support a smooth transition. He added that the company views the policy landscape as “quite navigable,” and said McKesson remains engaged with policymakers and industry stakeholders, with an emphasis on supporting access to care, particularly in the community setting.
Cash flow and capital deployment
McKesson ended the quarter with $3 billion in cash and cash equivalents. Free cash flow in the quarter was $1.1 billion, including $175 million in capital expenditures. For the trailing 12 months, free cash flow totaled $9.6 billion, which management attributed to operational performance and working capital management.
The company returned $781 million to shareholders during the quarter, including $680 million in share repurchases and $101 million in dividends. For fiscal 2026, McKesson expects to repurchase approximately $2.5 billion of shares, with weighted average diluted shares outstanding of approximately 124 million.
About McKesson (NYSE:MCK)
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.
