Healthcare distributor and services company McKesson (NYSE: MCK) beat Wall Street’s revenue expectations in calendar Q3 2026 (fiscal Q2 2027), with revenue up 7.6% year on year to $111 billion. Its non-GAAP profit of $11.68 per share was 8.6% above analysts’ consensus estimates.
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McKesson (MCK) Q3 CY2026 highlights:
- Revenue $111 billion vs S&P analysts’ consensus estimates of $110.1 billion (7.6% year-on-year growth, 0.8% beat)
- Adjusted EPS $11.68 vs S&P analysts’ consensus estimates of $10.75 (8.6% beat)
- Adjusted EPS guidance Management raised its full-year adjusted EPS guidance to $46 at the midpoint, a 3.1% increase
- Operating margin 1.4%, in line with the same quarter last year
- Free cash flow margin 2.7%, similar to the same quarter last year
- Market capitalization $124.7 billion
Revenue growth
A company’s long-term revenue performance can indicate its overall quality. Any business can post a good quarter or two, but many enduring ones grow for years. McKesson’s 10.8% annualized revenue growth over the last five years was decent. Its growth was slightly above the average healthcare company and shows its offerings resonate with customers.
Long-term growth matters most, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. McKesson’s annualized revenue growth of 12.6% over the last two years is above its five-year trend, suggesting its demand recently accelerated. 
McKesson also breaks out the revenue for its most important segment, U.S. Pharmaceutical. Over the last two years, McKesson’s U.S. Pharmaceutical revenue averaged 8.1% year-on-year growth. This segment has lagged the company’s overall revenue. 
This quarter, McKesson reported year-on-year revenue growth of 7.6%, and its $111 billion of revenue exceeded Wall Street’s consensus estimates by 0.8%.
Looking ahead, sell-side analysts expect revenue to grow 6.8% over the next 12 months, according to S&P, a deceleration versus the last two years. Its growth trajectory remains satisfactory given its scale and indicates the market is pricing in success for its products and services.
Adjusted operating margin
McKesson’s adjusted operating margin was largely unchanged over the last 12 months, averaging 1.6% over the last five years. Profitability was poor for a healthcare business because of its suboptimal cost structure.
Looking at the trend in its profitability, McKesson’s adjusted operating margin might have fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.
This quarter, McKesson generated an adjusted operating margin of 1.4%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.
Earnings per share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share, or EPS, points to the profitability of that growth. For example, a company could inflate its revenue through excessive spending on advertising and promotions.
McKesson’s EPS grew at a 14.8% compounded annual growth rate over the last five years, higher than its 10.8% annualized revenue growth. However, this alone doesn’t tell us much about its business quality because its adjusted operating margin didn’t improve.
A closer look at McKesson’s earnings helps explain its performance. A five-year view shows that McKesson has repurchased its stock, shrinking its share count by 25.1%. This indicates its EPS outperformed its revenue not because of increased operational efficiency but because of financial engineering, as buybacks boost per share earnings. 
In Q3, McKesson reported adjusted EPS of $11.68, up from $9.86 in the same quarter last year. This result beat analysts’ consensus estimates by 8.6%. Over the next 12 months, Wall Street expects McKesson’s full-year EPS to grow 12.7% from $42.64 to $48.07, according to S&P.
Key takeaways from McKesson’s Q3 results
McKesson delivered a solid quarter, with EPS topping Wall Street’s consensus estimates and full-year EPS guidance exceeding analysts’ expectations. Those were clear positives, but the market seemed to be hoping for more. Shares fell 3.2% to $1,036 immediately after the report.
Evaluating McKesson at its current price means looking at the bigger picture: valuation, business quality and the latest earnings. Read the full research report here (it’s free).
