Will Strong Segmental Performance Drive MCK's Top Line in Q2?

Core Insights - McKesson Corporation (MCK) is set to report its second-quarter fiscal 2026 results on November 5, with expectations of a solid performance following a strong start to the year, where revenues increased by 23% year over year to $97.8 billion and adjusted earnings per share (EPS) rose by 5% to $8.26 [2][3] Financial Performance - The upcoming quarterly results are anticipated to show a more normalized pace of growth compared to the first quarter, which was boosted by acquisitions and specialty drug volumes [3] - The Zacks Consensus Estimate for earnings is $8.92 per share, reflecting a 26.2% year-over-year improvement, while revenue estimates are pegged at $104.66 billion, indicating an 11.8% year-over-year increase [6][10] Segment Performance - The U.S. Pharmaceutical segment, McKesson's largest business, is expected to remain the primary growth driver, with revenues in the first quarter surging by 25.4% to $90 billion, supported by prescription volume growth and strong GLP-1 medication sales [7][8] - The Prescription Technology Solutions (RxTS) segment is projected to continue its growth trajectory, with revenues expected to increase by 7.4% to $1.36 billion, driven by high prior authorization volumes and expanding business [11][12] - The Medical-Surgical Solutions segment is likely to maintain modest growth of 2-6%, while international operations are expected to see limited growth due to divestitures impacting sales [13][14] Operational Efficiency - McKesson's broad-based strength is attributed to expanding specialty pharmaceutical demand, effective execution in oncology and multi-specialty services, and digital access solutions that enhance medication affordability [4] - Automation initiatives and disciplined cost management are expected to support margins, despite potential headwinds from higher operating costs related to recent acquisitions [5][10] Earnings Outlook - The model predicts an earnings beat for McKesson this earnings season, supported by a positive Earnings ESP of +1.16% and a Zacks Rank of 1 (Strong Buy) [15][16]