Why Is McKesson (MCK) Down 5.2% Since Last Earnings Report?

It has been about a month since the last earnings report for McKesson (MCK). Shares have lost about 5.2% in that time frame, underperforming the S&P 500.But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is McKesson due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.MCK Q2 Earnings Beat, Sales Miss, ’26 EPS View UpMcKesson Corporation reported second-quarter fiscal 2026 adjusted earnings per share (EPS) of $9.86, which beat the Zacks Consensus Estimate of $8.92 by 10.5%. The bottom line improved 39.5% on a year-over-year basis. The EPS growth was driven by strong operational growth across the business, including contributions from acquisitions coupled with a lower tax rate. The company also recorded gains in the Oncology & Multispecialty segment from the sale of an investment. Our model estimate for adjusted EPS was $8.57.GAAP EPS was $8.92 compared with $1.87 in the year-ago quarter. The prior-year quarter included a charge of $643 million for the fair value remeasurement of assets and liabilities and a charge of $227 million related to business rationalization initiatives.Revenue DetailsRevenues of $103.15 billion missed the Zacks Consensus Estimate by 1.4%. However, the top line surged 10.1% 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 Oncology & Multispecialty segment. Our model estimate for total revenues was pinned at $103.33 billion.Higher contributions from the Prescription Technology Solutions segment also aided the top line.Q2 Segmental AnalysisThe 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 Segment, Oncology & Multispecialty Segment, Prescription Technology Solutions Segment and Medical-Surgical Solutions Segment.Revenues from the North American Pharmaceutical segment totaled $86.48 billion, up 8.1% year over year. Per management, the upside was primarily driven by increased prescription volumes, including higher volumes from retail national account customers and specialty products.The U.S. Pharmaceutical and Specialty Solutions segment reported an adjusted operating profit of $851 million, up 12.9% from the prior-year quarter’s level. This was due to growth in the distribution of specialty products to health systems, and additional contributions from new product launches.Revenues from the Oncology & Multispecialty segment amounted to $12.04 billion, up 31.5% year over year. This improvement was led by increased provider and specialty distribution growth and contributions from acquisitions.Adjusted operating profit at the segment totaled $397 million, up 71.1% from the year-ago reported figure. The significant growth was due to higher sales and net gains from the sale of an investment and market decisions within The US Oncology Network.Revenues from the Prescription Technology Solutions segment totaled $1.38 billion, up 8.8% 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 $261 million, up 19.7% year over year, driven by higher demand for access solutions.Revenues from the Medical-Surgical Solutions segment totaled $2.95 billion, flat year over year. Sales were driven by higher volumes of specialty pharmaceuticals, completely offset by lower contributions from illness season products and testing.The Medical-Surgical segment reported an adjusted operating profit of $249 million, up 2.5% year over year. This was driven by operational efficiencies from the cost optimization initiatives.MarginsAdjusted gross profit in the reported quarter was $3.53 billion, up 8.9% on a year-over-year basis. The figure represented 3.4% of net revenues, down nearly 4 basis points (bps) year over year. Our model estimates for adjusted gross profit and adjusted gross margin were pinned at $3.53 billion and 3.4%, respectively.The company reported an adjusted operating income of $1.57 billion, up 24.9% from the year-ago quarter’s figure. Operating margin was 1.5%, expanding nearly 18 bps year over year. Our model estimates for adjusted operating profit and adjusted operating margin were pegged at $1.43 billion and 1.4%, respectively.Financial UpdateCash and cash equivalents totaled $4 billion compared with $2.42 billion during the first quarter of fiscal 2026.Cumulative net cash provided by operating activities amounted to $1.5 billion compared with $720 million in the year-earlier period.Fiscal 2026 GuidanceMcKesson raised its EPS guidance to $38.35-$38.85 from $38.05-$38.55 for fiscal 2026. The company expects total revenues to grow 11-15% in the fiscal year.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in estimates revision.The consensus estimate has shifted -8% due to these changes.VGM ScoresAt this time, McKesson has a strong Growth Score of A, a grade with the same score on the momentum front. Following the exact same course, the stock has a grade of A on the value side, putting it in the top quintile for this investment strategy.Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, McKesson has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Performance of an Industry PlayerMcKesson belongs to the Zacks Medical - Dental Supplies industry. Another stock from the same industry, West Pharmaceutical Services (WST), has gained 2.3% over the past month. More than a month has passed since the company reported results for the quarter ended September 2025.West Pharmaceutical reported revenues of $804.6 million in the last reported quarter, representing a year-over-year change of +7.7%. EPS of $1.96 for the same period compares with $1.85 a year ago.West Pharmaceutical is expected to post earnings of $1.83 per share for the current quarter, representing a year-over-year change of +0.6%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.3%.West Pharmaceutical has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.Quantum Computing Stocks Set To SoarArtificial intelligence has already reshaped the investment landscape, and its convergence with quantum computing could lead to the most significant wealth-building opportunities of our time.Today, you have a chance to position your portfolio at the forefront of this technological revolution. In our urgent special report, Beyond AI: The Quantum Leap in Computing Power, you'll discover the little-known stocks we believe will win the quantum computing race and deliver massive gains to early investors.Access the Report Free Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report McKesson Corporation (MCK): Free Stock Analysis Report West Pharmaceutical Services, Inc. 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