McKesson 2026 Q1 Earnings Misses Targets as Net Income Falls 13.4%

McKesson reported fiscal 2026 Q1 earnings on August 7, 2025, with results that fell below expectations. While revenue surged 23.4% year-over-year to $97.83 billion, EPS declined 10.8% to $6.28, and net income fell 13.4% to $831 million. The company raised its fiscal 2026 adjusted EPS guidance to $37.10–$37.90, reflecting strategic momentum and operational execution.

Revenue
McKesson's total revenue surged to $97.83 billion in fiscal 2026 Q1, up 23.4% from $79.28 billion in the prior-year period. The U.S. Pharmaceutical segment remained the company’s largest revenue driver, generating $89.95 billion, fueled by strong prescription volumes and oncology product demand. Prescription Technology Solutions contributed $1.43 billion, driven by increased activity in logistics and technology services. Medical-Surgical Solutions added $2.70 billion, reflecting modest growth in specialty pharmaceutical volumes, while International revenue reached $3.74 billion, supported by higher pharmaceutical distribution in Canada.

Earnings/Net Income
McKesson's earnings declined in fiscal 2026 Q1, with EPS falling to $6.28 from $7.04, a 10.8% drop. Net income also fell to $831 million, down 13.4% from $960 million in the prior year. The decline reflects pressure on profitability despite robust revenue growth.

Price Action
The stock price of McKesson has edged down 2.96% during the latest trading day, has dropped 4.37% during the most recent full trading week, and has tumbled 8.40% month-to-date.

Post-Earnings Price Action Review
A strategy of buying MCK when revenue misses and holding for 30 days delivered strong results, with a 329.44% return, vastly outperforming the benchmark return of 86.19%. The strategy's Sharpe ratio was 1.44, indicating good risk-adjusted returns, and it had a maximum drawdown of 0.00%, suggesting it effectively managed risk. The 30-day holding period allowed for some market volatility to play out while still capturing the stock's growth.

CEO Commentary
McKesson CEO Brian Tyler described the quarter as a “standout,” highlighting record revenue of $97.8 billion, a 23% year-over-year increase. He credited strong execution of the company’s strategy and recent acquisitions, including PRISM Vision Holdings and Core Ventures, which expanded capabilities in oncology and specialty care. Tyler expressed confidence in the fiscal 2026 outlook and raised adjusted EPS guidance to $37.10–$37.90.

Guidance
McKesson raised fiscal 2026 Adjusted Earnings per Diluted Share guidance to a range of $37.10 to $37.90, representing 12% to 15% growth compared to the prior year. Excluding fiscal 2025 gains from equity investments, the range indicates 14% to 17% growth. The company does not forecast GAAP earnings per diluted share.

Additional News
On April 2, 2025, McKesson announced the completion of its acquisition of an 80% controlling interest in PRISM Vision Holdings, LLC, a leading provider of general ophthalmology and retina management services. On August 26, 2024, the company agreed to acquire a controlling interest in Florida Cancer Specialists & Research Institute LLC’s Core Ventures, expected to close on June 2, 2025. Additionally, in fiscal 2025, McKesson returned $3.5 billion to shareholders through $3.1 billion in common stock repurchases and $345 million in dividend payments. During the fiscal year, the company generated $6.1 billion in cash from operations and $5.2 billion in Free Cash Flow. McKesson also announced its intention to separate its Medical-Surgical Solutions segment into an independent company, a strategic move aimed at unlocking value for shareholders and focusing growth on higher-margin opportunities in oncology and biopharma.