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McKesson (MCK) to Post Q1 Earnings: What's in the Offing?

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McKesson Corporation’s (MCK - Free Report) first-quarter fiscal 2021 results are scheduled to release on Aug 3, before the opening bell.

The company delivered an earnings surprise of 4.2% in the last reported quarter.

Q1 Estimates

The Zacks Consensus Estimate for McKesson’s fiscal first-quarter earnings per share is pegged at $2.30, suggesting a decline of 30.5% from the prior-year quarter. The same for revenues stands at $54.42 billion, indicating a decrease of 2.4% from the year-ago reported figure.

Factors to Note

McKesson expects fiscal first-quarter results to reflect segmental strength.

The U.S. Pharmaceutical and Specialty Solutions segment is likely to have acted as a key catalyst in the quarter to be reported.

Notably, the segment may have benefited from branded pharmaceutical price increases and higher volumes from retail national account customers in the to-be-reported quarter. However, branded to generic conversions might have weighed on the segment’s performance. Nonetheless, the company’s broad spectrum of specialty biopharmaceutical providers and manufacturers are expected to have contributed to the fiscal first-quarter performance.

McKesson Corporation Price and EPS Surprise

McKesson Corporation Price and EPS Surprise

McKesson Corporation price-eps-surprise | McKesson Corporation Quote

During third-quarter fiscal 2020, CoverMyMeds and RxCrossroads announced the launch of AMP (Access for More Patients), which is a first-in-class technology driven patient support solution that transforms how patients access afford and adhere to their medications.

On Dec 12, 2019, McKesson and Walgreens Boots Alliance announced an agreement to form a joint venture that is anticipated to combine their respective pharmaceutical wholesale businesses in Germany.

These positive developments may get reflected in the fiscal first-quarter results.

McKesson Canada plays a crucial role in providing solutions to manufacturers, pharmacies and hospitals, which cater to needs of patients in Canada every day. Additionally, McKesson Canada has broad specialty assets and capabilities and is well-positioned to participate in the growth of specialty in the Canadian market. In fourth-quarter fiscal 2020, the company witnessed growth in Canadian operations and the trend is likely to have continued in first-quarter fiscal 2021.

The COVID-19 pandemic resulted in the deferral of elective and non-critical procedures, which led to a weakened demand in the first half of the year. Consequently, the impact of the same may get reflected in the Medical-Surgical solutions segment’s fiscal first-quarter revenues.

Earnings Whispers

Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Earnings ESP: McKesson has an Earnings ESP of -5.88%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: McKesson carries a Zacks Rank #3.

Stocks Worth a Look

Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.

Integra LifeSciences Holdings Corporation (IART - Free Report) has an Earnings ESP of +20.69% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

GW Pharmaceuticals plc (GWPH - Free Report) has an Earnings ESP of +17.38% and a Zacks Rank of 3.

Nevro Corp. (NVRO - Free Report) has an Earnings ESP of +15.17% and a Zacks Rank of 3.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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