McKesson, Cencora Gain From Drug Inflation as McKesson Q1 Revenue Hits $105.4 Billion
Updated
Updated · NAI 500 · Aug 21
McKesson, Cencora Gain From Drug Inflation as McKesson Q1 Revenue Hits $105.4 Billion
1 articles · Updated · NAI 500 · Aug 21
Summary
McKesson’s fiscal Q1 2027 revenue rose 8% to $105.4 billion and adjusted EPS climbed 20% to $9.93, prompting it to raise full-year EPS guidance to $44.20-$45.00.
Price-appreciation and inflation-linked clauses in distributor contracts let McKesson and Cencora capture extra profit when drugmakers lift prices, including gains on inventory bought at lower prices.
Cencora’s latest quarterly revenue increased 3.8% to $78.4 billion and adjusted EPS rose 7.5% to $4.75; it lifted full-year EPS guidance to $17.65-$17.90 and sees operating income up 12%-14%.
July U.S. CPI ran at 3.4%, with energy up 14.7%, while producer prices stayed 4.7% higher year over year, creating the inflation backdrop that can support those contract mechanics.
The benefit is not a pure hedge: slower manufacturer price hikes, generic-drug deflation, regulation, tariffs, wages and transport costs could still pressure distributor margins.