McKesson 2025 Q4 Earnings Strong Performance as Net Income Surges 57.3%

McKesson Corp. (MCK) reported its fiscal 2025 Q4 earnings on May 8th, 2025 with results that exceeded expectations. The company announced a total revenue increase of 18.9% year-on-year, reaching $90.82 billion, although this missed analysts' estimates of $94.00 billion. The adjusted earnings per diluted share came in at $10.12, beating the consensus estimate of $9.81 per share. mckesson raised its fiscal 2026 guidance, forecasting adjusted earnings per diluted share to grow by 11% to 14%, signaling optimism in continued operational momentum and strategic investments.

Revenue
McKesson's revenue growth for Q4 2025 showcased strong performance across various segments. Prescription Technology Solutions generated $1.34 billion, while Distribution Solutions reached $89.48 billion. The U.S. Pharmaceutical segment saw significant growth, contributing $83.17 billion. Medical-Surgical Solutions added $2.85 billion, and the International segment brought in $3.46 billion. Corporate revenues were modest at $4 million, culminating in a total revenue figure of $90.82 billion.

Earnings/Net Income
McKesson's EPS increased significantly by 66.0% to $10.06 in 2025 Q4 from $6.06 in 2024 Q4, reflecting strong earnings growth. The company also reported a net income of $1.31 billion, a 57.3% rise from $830 million in 2024 Q4. This demonstrates robust profitability improvements.

Price Action
The stock price of McKesson experienced a 3.24% decline during the latest trading day, edged down 2.34% over the most recent full trading week, yet climbed 4.27% month-to-date.

Post-Earnings Price Action Review
The strategy of purchasing McKesson shares following a revenue increase and holding them for 30 days has historically delivered substantial returns, achieving a cumulative gain of 419.53% over the past five years. Despite experiencing a maximum drawdown of -26.34%, the strategy has demonstrated resilience, underscoring its effectiveness in volatile markets. With a Sharpe ratio of 1.57 and a compound annual growth rate (CAGR) of 39.22%, the approach has produced strong risk-adjusted returns, making it an attractive option for capital appreciation.

CEO Commentary
"McKesson delivered strong fourth quarter performance reporting revenue growth of 19% and Adjusted Earnings per Diluted Share growth of 64%. This marks another year of strong financial results, above our long-term targets, underpinned by operational execution against our strategic priorities, and disciplined and focused capital deployment," said Brian Tyler, Chief Executive Officer. He highlighted the strength of the core pharmaceutical distribution business, the expansion of the Oncology platform, and growth in biopharma solutions as key performance drivers. Tyler expressed gratitude to Team McKesson and emphasized the company’s strong position to accelerate growth through strategic investments.

Guidance
McKesson established a fiscal 2026 Adjusted Earnings per Diluted Share guidance range of $36.75 to $37.55, indicating forecasted growth of 11% to 14% compared to the prior year. Excluding fiscal 2025 net gains from McKesson Ventures' equity investments, the guidance indicates a growth range of 13% to 16%. The company reaffirmed its long-term Adjusted Earnings per Diluted Share growth target of 12% to 14% and updated the U.S. Pharmaceutical segment operating profit growth target from 5%-7% to 6%-8%.

Additional News
Recently, McKesson has been active in strategic acquisitions, expanding its footprint in specialty healthcare services. In April 2025, the company completed the acquisition of an 80% controlling interest in PRISM Vision Holdings, enhancing its offerings in ophthalmology and retina management services. Moreover, McKesson is set to close its acquisition of Core Ventures from Florida Cancer Specialists & Research Institute by June 2, 2025, bolstering its presence in oncology. On the financial front, McKesson also returned $3.1 billion to shareholders via dividends and share repurchases, demonstrating a commitment to shareholder value while navigating a dynamic market environment.

Ask Aime: How does McKesson's earnings growth impact its stock price and future guidance?