McKesson Corporation announced an update to its outlook for adjusted earnings per diluted share for the fiscal year ending March 31, 2016, from the previous range of $12.50 to $13.00 to a new range of $12.60 to $12.90. The updated outlook for Fiscal 2016 reflects McKesson's expectation that operating profit derived as a result of generic pharmaceutical pricing trends will be weaker in the second half of the fiscal year compared to previous expectations. This trend is partially offset by a reduction in the company's expected full year adjusted tax rate to 29.5%, resulting in a benefit of approximately 28 cents per diluted share compared to prior expectations. The reduction in the full-year adjusted tax rate is primarily driven by a change in the expected mix of income and also includes certain favorable discrete tax items totaling 7 cents per diluted share recognized in the third quarter.

The company has a preliminary target of 7% to 12% growth in adjusted earnings per diluted share for fiscal 2017. The preliminary fiscal 2017 outlook assumes 7% to 12% growth when compared to the fiscal 2016 outlook of $12.60 to $12.90 in adjusted earnings per diluted share, less 48 cents per diluted share related to gains on business dispositions and favorable discrete tax items in fiscal 2016. In fiscal 2017, the company anticipates an adjusted earnings headwind of approximately 85 cents per diluted share year-over-year, driven by continued weakness in generic pharmaceutical pricing trends for the company's mix of business, the expiration of its contract with Optum, and the transition of its contracts with Omnicare and Target. The company expects adjusted tax rate of approximately 30% to 32%.