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MCK beat Q4 EPS estimates as oncology and specialty distribution fueled operational growth.
McKesson's Q4 revenues rose 6%, but missed estimates despite higher prescription volumes.
MCK expects fiscal 2027 adjusted EPS growth of 12-14% with revenue growth of 5-9%.
McKesson Corporation (MCK - Free Report) reported fourth-quarter fiscal 2026 adjusted earnings per share (EPS) of $11.69, which beat the Zacks Consensus Estimate of $11.56 by 1.1%. The bottom line improved 15.5% on a year-over-year basis. The EPS growth was driven by strong operational improvement across the business, including contributions from acquisitions in the Oncology & Multispecialty segment.
GAAP EPS was $13.71 compared with $10.01 in the year-ago quarter. The significant improvement in EPS was due to a pre-tax credit within the North American Pharmaceutical segment related to the Rite Aid bankruptcy.
For fiscal 2026, adjusted EPS was up 18.3% to $39.11 while GAAP EPS gained 49.2% to $38.38.
Revenue Details
Revenues of $96.3 billion missed the Zacks Consensus Estimate by 5.5%. The top line gained 6% year over year, primarily driven by increased prescription volumes from retail national account customers and growth in the distribution of oncology and specialty products, including contributions from the Oncology & Multispecialty segment. These were partially offset by lower contributions from branded pharmaceuticals.
Higher contributions from the Prescription Technology Solutions segment also aided the top line.
For fiscal 2026, revenues amounted to $403.43 billion, gaining 12.4% year over year.
Shares of MCK were down 0.4% in the after-hours trading on May 7, following mixed results. The company’s shares have lost 9.7% so far this year compared with the industry’s 10.4% decline. The S&P 500 Index has increased 8.6% in the same time frame.
Image Source: Zacks Investment Research
Q4 Segmental Analysis
The company started reporting under new reportable segments and organizational structure, effective from the second quarter of fiscal 2026. The current reporting segments are North American Pharmaceutical, Oncology & Multispecialty, Prescription Technology Solutions and Medical-Surgical Solutions.
Revenues from the North American Pharmaceutical segment totaled $79.12 billion, up 3% year over year. Per management, the upside was primarily driven by increased prescription volumes, including higher volumes from specialty products, partially offset by lower contributions from branded pharmaceuticals.
The U.S. Pharmaceutical and Specialty Solutions segment reported an adjusted operating profit of $980 million, up 11% from the prior-year quarter’s level. This was due to growth in the distribution of specialty products to health systems.
Revenues from the Oncology & Multispecialty segment amounted to $12.71 billion, up 31% year over year. This improvement can be attributed to growth in provider solutions and specialty distribution, and contributions from acquisitions.
Adjusted operating profit at the segment totaled $385 million, up 53% from the year-ago reported figure.
Revenues from the Prescription Technology Solutions segment totaled $1.5 billion, up 12% year over year. This uptick was due to increased prescription volumes in the third-party logistics and technology services businesses.
The segment reported an adjusted operating profit of $322 million, up 13% year over year, driven by higher demand for access solutions.
Revenues from the Medical-Surgical Solutions segment totaled $2.87 billion, up 1% year over year. Sales were driven by higher volumes of specialty pharmaceuticals, partially offset by lower contributions from the ambulatory care channel.
The Medical-Surgical segment reported an adjusted operating profit of $271 million, up 1% year over year, driven by cost optimization. This was partially offset by lower contributions from the ambulatory care channel.
Margins
Adjusted gross profit in the reported quarter was $3.86 billion, up 14% on a year-over-year basis. The figure represented 4.01% of net revenues, up nearly 28 basis points (bps) year over year.
The company reported an adjusted operating income of $1.97 billion, up 14.6% from the year-ago quarter’s figure. Operating margin was 2.04%, expanding nearly 15 bps year over year.
Financial Update
Cash and cash equivalents totaled $3.98 billion compared with $2.96 billion in the third quarter of fiscal 2026.
Cumulative net cash provided by operating activities amounted to $6.16 billion against cumulative net cash used in operating activities of $6.09 billion in the year-earlier period.
Fiscal 2027 Guidance
McKesson issued its EPS and sales guidance for fiscal 2027. The company expects adjusted EPS to improve 12-14% to $43.80-$44.60. It anticipates total revenues to grow 5-9%.
MCK expects North American Pharmaceutical segment sales to grow 4-8%, with operating profit projected to improve 5.5-9.5%. Sales from the Oncology and Multispecialty segment are estimated to grow 14.5-18.5%, with operating profit projected to improve 13.5-17.5%. In the Prescription Technology Solutions segment, MCK anticipates revenue growth of 2.5% to 6.5% and operating profit growth of 11% to 15%. MCK anticipates revenue growth of 1% to 6%. It expects operating profit to range from flat to up 4% for the Medical-Surgical Solutions segment.
McKesson Corporation Price, Consensus and EPS Surprise
McKesson exited the fourth quarter of fiscal 2026 on a mixed note, with earnings beating estimates but sales missing the same.However, the company’s quarterly performance remained broad-based, with contributions from all major segments. Specialty distribution was again a standout, supported by strong volumes and continued market share gains in community oncology.
MCK’s oncology and multispecialty platforms, along with its expanding suite of biopharma services programs, continue to drive customer demand. The portfolio transformation also advanced, with progress toward separating the Medical-Surgical Solutions business and continued momentum from recent acquisitions in oncology and eye care. MCK expects to complete the spin-off of the Medical-Surgical Solutions business in the second half of calendar 2027. The company also completed the divestiture of its retail and distribution businesses in Norway, marking the final phase of its exit from European operations.
MCK’s Zacks Rank and Stocks to Consider
McKesson currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are West Pharmaceutical Services, Inc. (WST - Free Report) , Intuitive Surgical (ISRG - Free Report) and Cardinal Health, Inc. (CAH - Free Report) .
West Pharmaceutical reported first-quarter 2026 earnings per share (EPS) of $2.13, which beat the Zacks Consensus Estimate by 26.8%. Revenues of $844.9 million surpassed the Zacks Consensus Estimate by 8.5%. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
West Pharmaceutical has a long-term estimated growth rate of 13.9%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 19.37%.
Intuitive Surgical reported first-quarter 2026 adjusted EPS of $2.50, which beat the Zacks Consensus Estimate by 20.19%. Revenues of $2.77 billion surpassed the Zacks Consensus Estimate by 6.2%. It currently carries a Zacks Rank of 2 (Buy).
Intuitive Surgical has a long-term estimated growth rate of 14.9%. ISRG’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 16.82%.
Cardinal Health, carrying a Zacks Rank of 2 at present, reported third-quarter fiscal 2026 adjusted EPS of $3.17, which beat the Zacks Consensus Estimate by 13.2%. Revenues of $60.94 billion missed the Zacks Consensus Estimate by 2.3%.
Cardinal Health has a long-term estimated growth rate of 15.6%. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 10.27%.
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MCK Stock Falls Despite Q4 Earnings Beat, Sales Miss, Margins Up
Key Takeaways
McKesson Corporation (MCK - Free Report) reported fourth-quarter fiscal 2026 adjusted earnings per share (EPS) of $11.69, which beat the Zacks Consensus Estimate of $11.56 by 1.1%. The bottom line improved 15.5% on a year-over-year basis. The EPS growth was driven by strong operational improvement across the business, including contributions from acquisitions in the Oncology & Multispecialty segment.
GAAP EPS was $13.71 compared with $10.01 in the year-ago quarter. The significant improvement in EPS was due to a pre-tax credit within the North American Pharmaceutical segment related to the Rite Aid bankruptcy.
For fiscal 2026, adjusted EPS was up 18.3% to $39.11 while GAAP EPS gained 49.2% to $38.38.
Revenue Details
Revenues of $96.3 billion missed the Zacks Consensus Estimate by 5.5%. The top line gained 6% year over year, primarily driven by increased prescription volumes from retail national account customers and growth in the distribution of oncology and specialty products, including contributions from the Oncology & Multispecialty segment. These were partially offset by lower contributions from branded pharmaceuticals.
Higher contributions from the Prescription Technology Solutions segment also aided the top line.
For fiscal 2026, revenues amounted to $403.43 billion, gaining 12.4% year over year.
Shares of MCK were down 0.4% in the after-hours trading on May 7, following mixed results. The company’s shares have lost 9.7% so far this year compared with the industry’s 10.4% decline. The S&P 500 Index has increased 8.6% in the same time frame.
Image Source: Zacks Investment Research
Q4 Segmental Analysis
The company started reporting under new reportable segments and organizational structure, effective from the second quarter of fiscal 2026. The current reporting segments are North American Pharmaceutical, Oncology & Multispecialty, Prescription Technology Solutions and Medical-Surgical Solutions.
Revenues from the North American Pharmaceutical segment totaled $79.12 billion, up 3% year over year. Per management, the upside was primarily driven by increased prescription volumes, including higher volumes from specialty products, partially offset by lower contributions from branded pharmaceuticals.
The U.S. Pharmaceutical and Specialty Solutions segment reported an adjusted operating profit of $980 million, up 11% from the prior-year quarter’s level. This was due to growth in the distribution of specialty products to health systems.
Revenues from the Oncology & Multispecialty segment amounted to $12.71 billion, up 31% year over year. This improvement can be attributed to growth in provider solutions and specialty distribution, and contributions from acquisitions.
Adjusted operating profit at the segment totaled $385 million, up 53% from the year-ago reported figure.
Revenues from the Prescription Technology Solutions segment totaled $1.5 billion, up 12% year over year. This uptick was due to increased prescription volumes in the third-party logistics and technology services businesses.
The segment reported an adjusted operating profit of $322 million, up 13% year over year, driven by higher demand for access solutions.
Revenues from the Medical-Surgical Solutions segment totaled $2.87 billion, up 1% year over year. Sales were driven by higher volumes of specialty pharmaceuticals, partially offset by lower contributions from the ambulatory care channel.
The Medical-Surgical segment reported an adjusted operating profit of $271 million, up 1% year over year, driven by cost optimization. This was partially offset by lower contributions from the ambulatory care channel.
Margins
Adjusted gross profit in the reported quarter was $3.86 billion, up 14% on a year-over-year basis. The figure represented 4.01% of net revenues, up nearly 28 basis points (bps) year over year.
The company reported an adjusted operating income of $1.97 billion, up 14.6% from the year-ago quarter’s figure. Operating margin was 2.04%, expanding nearly 15 bps year over year.
Financial Update
Cash and cash equivalents totaled $3.98 billion compared with $2.96 billion in the third quarter of fiscal 2026.
Cumulative net cash provided by operating activities amounted to $6.16 billion against cumulative net cash used in operating activities of $6.09 billion in the year-earlier period.
Fiscal 2027 Guidance
McKesson issued its EPS and sales guidance for fiscal 2027. The company expects adjusted EPS to improve 12-14% to $43.80-$44.60. It anticipates total revenues to grow 5-9%.
MCK expects North American Pharmaceutical segment sales to grow 4-8%, with operating profit projected to improve 5.5-9.5%. Sales from the Oncology and Multispecialty segment are estimated to grow 14.5-18.5%, with operating profit projected to improve 13.5-17.5%. In the Prescription Technology Solutions segment, MCK anticipates revenue growth of 2.5% to 6.5% and operating profit growth of 11% to 15%. MCK anticipates revenue growth of 1% to 6%. It expects operating profit to range from flat to up 4% for the Medical-Surgical Solutions segment.
McKesson Corporation Price, Consensus and EPS Surprise
McKesson Corporation price-consensus-eps-surprise-chart | McKesson Corporation Quote
Summing Up
McKesson exited the fourth quarter of fiscal 2026 on a mixed note, with earnings beating estimates but sales missing the same.However, the company’s quarterly performance remained broad-based, with contributions from all major segments. Specialty distribution was again a standout, supported by strong volumes and continued market share gains in community oncology.
MCK’s oncology and multispecialty platforms, along with its expanding suite of biopharma services programs, continue to drive customer demand. The portfolio transformation also advanced, with progress toward separating the Medical-Surgical Solutions business and continued momentum from recent acquisitions in oncology and eye care. MCK expects to complete the spin-off of the Medical-Surgical Solutions business in the second half of calendar 2027. The company also completed the divestiture of its retail and distribution businesses in Norway, marking the final phase of its exit from European operations.
MCK’s Zacks Rank and Stocks to Consider
McKesson currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are West Pharmaceutical Services, Inc. (WST - Free Report) , Intuitive Surgical (ISRG - Free Report) and Cardinal Health, Inc. (CAH - Free Report) .
West Pharmaceutical reported first-quarter 2026 earnings per share (EPS) of $2.13, which beat the Zacks Consensus Estimate by 26.8%. Revenues of $844.9 million surpassed the Zacks Consensus Estimate by 8.5%. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
West Pharmaceutical has a long-term estimated growth rate of 13.9%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 19.37%.
Intuitive Surgical reported first-quarter 2026 adjusted EPS of $2.50, which beat the Zacks Consensus Estimate by 20.19%. Revenues of $2.77 billion surpassed the Zacks Consensus Estimate by 6.2%. It currently carries a Zacks Rank of 2 (Buy).
Intuitive Surgical has a long-term estimated growth rate of 14.9%. ISRG’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 16.82%.
Cardinal Health, carrying a Zacks Rank of 2 at present, reported third-quarter fiscal 2026 adjusted EPS of $3.17, which beat the Zacks Consensus Estimate by 13.2%. Revenues of $60.94 billion missed the Zacks Consensus Estimate by 2.3%.
Cardinal Health has a long-term estimated growth rate of 15.6%. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 10.27%.