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MCK · Q1 FY2027
Archived report (Q1 FY2027). Latest deep dive →
The quarter in brief
The distributor's razor-thin machine ran faster and better — revenue +8%, operating income +27%, adjusted EPS +20% — while the headline 22% drop in net income to shareholders is accounting noise: a one-time $293M redemption-value adjustment for the Medical-Surgical minority stake sold to Apollo ahead of the Wellverse spin-off.
Net Income (consolidated)
$1,032M
up 24.2% y/y
Revenues
$105,380M
up 7.7% y/y
Operating Income
$1,319M
up 27.3% y/y
Gross Profit
$3,685M
up 12.4% y/y
All figures in $M.
| Line item | Amount and change |
|---|---|
| North American Pharmaceutical ≈ | $86,800 · +5% |
| Oncology & Multispecialty ≈ | $14,200 · +33% |
| Prescription Tech ≈ | $1,600 · +9% |
| Medical-Surgical ≈ | $2,780 · +4% |
| Revenues | $105,380 · +7.7% |
| Cost of Sales | $101,695 · +7.6% |
| Gross Profit | $3,685 · +12.4% · 3.5% margin |
| Selling, Distribution, G&A | $2,264 · +3.1% |
| Restructuring & Impairment | $136 · vs $47 |
| Litigation Credit, net | $34 · vs $0 |
| Operating Income | $1,319 · +27.3% · 1.25% of revenue |
| Other Income, net | $66 · +3.1% |
| Interest Expense | $77 · +57% |
| Pre-Tax Income | $1,308 · +24.4% |
| Income Tax | $276 · ETR 21.1% |
| Net Income (consolidated) | $1,032 · +24.2% |
| Noncontrolling Interests (incl. $293M adj.) | $418 · vs $47 |
| Net Income to Shareholders | $614 · -21.7% · adjusted EPS +20% |
Verdict: the distributor's razor-thin machine ran faster and better — revenue +8%, operating income +27%, adjusted EPS +20% — while the headline 22% drop in net income to shareholders is accounting noise: a one-time $293M redemption-value adjustment for the Medical-Surgical minority stake sold to Apollo ahead of the Wellverse spin-off.
Quarter used $220M of operating cash (seasonal working capital; FCF −$372M); returned $2.6B to shareholders ($2.5B buybacks incl. ASR). Dividend raised 15% to $0.94/sh — tenth consecutive annual increase. FY2027 adjusted EPS guidance raised to $44.20-45.00.
Source and notation
* marks non-cash / ≈ estimated. Segment revenues are press-release approximations. Source: McKesson press release 8-K EX-99.1 (SEC EDGAR).
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<figure> <a href="https://whoreportstoday.com/t/mck/q1-fy2027"><img src="https://whoreportstoday.com/t/mck/q1-fy2027/sankey.png" alt="MCK Q1 FY2027: where the revenue went" loading="lazy" style="max-width:100%;height:auto"></a> <figcaption>Source: <a href="https://whoreportstoday.com/t/mck/q1-fy2027">Who Reports Today</a>, licensed under <a href="https://creativecommons.org/licenses/by/4.0/">CC BY 4.0</a></figcaption> </figure>
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<a href="https://whoreportstoday.com/t/mck/q1-fy2027">MCK Q1 FY2027 earnings chart (Who Reports Today)</a>
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- The Sankey's shape IS the business model: $101.7B of $105.4B revenue flows straight through to cost of drugs — a 3.5% gross margin on which McKesson still compounds double-digit profit growth.
- Attributable net income fell 22% for a one-time reason: a $293M redemption-value adjustment on redeemable noncontrolling interests after selling ~13% of Medical-Surgical Solutions to Apollo Funds for $1.25B — the future 'Wellverse' spin-off (unveiled 08/05/2026).
- The year-ago quarter had its own one-off in the other direction: a $189M bad-debt provision tied to the Rite Aid bankruptcy — underlying growth is cleaner than either headline.
- Oncology & Multispecialty is the growth engine: revenue +33% to $14.2B with adjusted segment profit +41%; core NA Pharmaceutical grew 5% with adjusted profit +19%.
- Claims and litigation was a rare CREDIT of $34M this quarter (opioid-era charges reversing at the margin); restructuring/impairment tripled to $136M.
- Negative free cash flow of −$372M is normal Q1 seasonality for a drug distributor (working-capital build); the company still bought back $2.5B of stock in the quarter.
- Diluted share count fell 5% y/y — the buyback engine adds ~5 points to per-share growth every year.
- Interest expense jumped 57% to $77M, partly the new $2.25B Term Loan B raised to fund the Medical-Surgical separation.
What distorts the picture in this report and what to watch beyond the headlines.
MCK — McKesson is a healthcare services and information technology company that distributes pharmaceuticals and medical supplies.
It is headquartered in Irving, Texas, and serves pharmacies, hospitals, and healthcare providers.
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