McKesson Reports on 4 November: Gross Margin and the Oncology Mix, Not Revenue, Decide the Quarter
McKesson reports fiscal second-quarter 2027 results on 4 November, with consensus at $10.72 EPS on $109.90 billion of revenue, up 8.7% and 6.5% from a year earlier. On a gross margin near 3.5%, the quarter turns on whether the shift toward oncology and specialty keeps that margin widening.
Maz Vantage Research ·
McKesson reports its fiscal second-quarter 2027 results, covering the three months to September, on Wednesday, 4 November. The drug distributor moves more than $100 billion of products a quarter, and keeps only about three and a half cents of each dollar as gross profit. That is why the revenue figure says little on its own. What decides this quarter is whether the gross margin keeps widening as the mix shifts toward oncology and specialty drugs.
What the street expects
The consensus calls for adjusted EPS of $10.72 on revenue of $109.90 billion. In the same quarter a year ago, fiscal Q2 2026, McKesson earned $9.86 per share on revenue of $103.15 billion.
| Fiscal Q2 | Consensus FY2027 | Actual FY2026 | Change |
|---|---|---|---|
| EPS (adjusted) | $10.72 | $9.86 | +8.7% |
| Revenue | $109.90B | $103.15B | +6.5% |
Changes are simple arithmetic on the consensus and last year's reported figures.
The expected growth rates are close together, with EPS only modestly ahead of revenue. That is a cautious setup for a company whose profits have recently grown much faster than its sales.
The track record
McKesson has beaten the EPS consensus in each of the last four quarters, but its revenue record is mixed:
- Fiscal Q1 2027 (June): EPS $9.93 vs $9.56; revenue $105.38B vs $103.88B — beat on both.
- Fiscal Q4 2026 (March): EPS $11.69 vs $11.56; revenue $96.30B vs $101.35B — EPS beat, revenue about 5% short.
- Fiscal Q3 2026 (December): EPS $9.34 vs $9.17; revenue $106.16B vs $105.80B — beat on both.
- Fiscal Q2 2026 (September): EPS $9.86 vs $9.03; revenue $103.15B vs $104.14B — EPS beat, revenue about 1% short.
Two revenue misses in four quarters, alongside four EPS beats, is the pattern of a distributor whose earnings depend on what it sells more than on how much. A revenue shortfall alone would not make this a bad quarter.
The line that decides the quarter
The line to watch is gross margin, driven by the oncology and multispecialty business.
In the filed accounts, gross margin was 3.43% in fiscal Q2 2026, 3.47% in fiscal Q3 and 3.50% in fiscal Q1 2027 (our arithmetic on reported gross profit and revenue; the March quarter, at 4.20%, is seasonally different and not comparable). In the June quarter, gross profit rose 12.4% from a year earlier on revenue growth of 7.7%, and operating income rose from $1.04 billion to $1.32 billion, about 27%.
The segment data shows where that came from. Oncology and Multispecialty revenue reached $14.22 billion in the June quarter, up from $12.04 billion in the September 2025 quarter, taking its share of group revenue from about 11.7% to 13.5%. Prescription Technology Solutions grew from $1.43 billion to $1.57 billion year on year, about 9%. North American Pharmaceutical, by far the largest segment at $86.77 billion, was nearly flat against $86.48 billion in the September 2025 quarter.
The scale makes small moves matter. On the consensus revenue of $109.90 billion, each 10 basis points of gross margin is worth about $110 million of gross profit (simple arithmetic). If the margin holds near 3.50% or edges higher, the $10.72 consensus looks conservative next to the June quarter's profit growth. If it slips back toward last year's 3.43% because lower-margin pharmaceutical volume outgrew specialty, the quarter can beat on revenue and still disappoint.
One more item for the accounts: in the June quarter, reported net income of $614 million was well below income from continuing operations of $1.03 billion. The release should make clear what sits in that gap, and readers should keep the adjusted figures separate from the GAAP line.
Valuation and the Maz Rating
At $998.38, close to its 52-week high of $1,030.27, McKesson has a market value of about $116 billion and trades at 26.6 times trailing GAAP earnings, or about 22 times forward adjusted earnings on the site's data. The analyst price-target consensus is $983.13 (median $988.50, range $845 to $1,200), slightly below the current price.
On Maz Vantage, McKesson holds a Maz Rating of 4.55 out of 5 (Strong Buy). Profitability (4.46) and Momentum (4.21) lead, Growth scores 3.72 and Financial Health 3.59, while Valuation is the weak factor at 2.12. The score is about the quality and direction of the business, not the price.
Bottom line
Revenue near $110 billion is the headline, but McKesson's quarter will be judged on the gross margin and the oncology mix behind it. A margin at or above the June quarter's 3.50% would confirm that profit growth can keep outpacing sales. A slip back toward 3.4% would matter more than any revenue beat, especially with the shares trading above the average analyst target.
This is a preview based on published consensus and filed accounts, not investment advice.