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McKesson (MCK) to Report Q2 Earnings: Is a Beat in the Cards?
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McKesson Corporation (MCK - Free Report) is scheduled to report its second-quarter fiscal 2023 results on Nov 1, after the market close.
In the last reported quarter, the company delivered an earnings surprise of 9.8%. It beat estimates in three of the trailing four quarters and missed once, the average surprise being 13.00%.
Q2 Estimates
The Zacks Consensus Estimate for McKesson’s fiscal second-quarter earnings per share is pegged at $6.13, suggesting a decline of 0.3% from the prior-year quarter. The same for revenues stands at $69.66 billion, indicating an improvement of 4.6% from the year-ago reported figure.
Factors to Note
McKesson’s fiscal second-quarter results are expected to reflect segmental strength.
The U.S. Pharmaceutical and Specialty Solutions segment might have acted as a key growth driver in the quarter to be reported. The consensus mark for this segment’s revenues is pegged at $57.9 billion, indicating an improvement of 13.8% from the prior-year quarter.
The segment is likely to have benefited from market growth 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. Nevertheless, the company’s broad spectrum of specialty biopharmaceutical providers and manufacturers is expected to have contributed to the fiscal second-quarter performance.
Growth and improvement in the primary care business and contribution from kitting, storage, and distribution of ancillary supplies to the U.S. government's COVID-19 vaccine program are likely to have positively impacted the company’s Medical-Surgical solutions segment.
McKesson’s collaboration with the U.S. government's COVID-19 vaccine distribution effort highlighted the company’s role in the COVID-19 response. It was selected by the U.S. government as the centralized distributor of refrigerated and frozen COVID-19 vaccines and the ancillary kits used to administer those vaccines.
The company’s U.S. and international distribution businesses have been playing a key role in the pandemic response. Meanwhile, its growing partnership with the U.S. government's COVID-19 vaccine distribution efforts reflects operational excellence and capabilities.
In July 2022, the U.S. government renewed the existing COVID-19 vaccine distribution contract. The company continues to reap benefits from its COVID-related programs in Canada and European operations.
These positive developments may get reflected in the fiscal second-quarter results.
Continued growth in the Medical-Surgical segment and Prescription Technology Solutions are likely to have benefited the company’s top line in the to-be-reported quarter.
Earnings Beat Likely
Our proven model predicts an earnings beat for McKesson this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($6.15 per share) and the Zacks Consensus Estimate ($6.13 per share), is +0.27%.
Here are a few other medical stocks worth considering, as these also have the right combination of elements to beat on earnings this reporting cycle:
Abiomed has an Earnings ESP of +4.18% and is a Zacks #3 Ranked stock. ABMD has an earnings yield of 1.87% against the industry’s yield of (9.87%).
Abiomed’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 10.89%.
Elanco Animal Health (ELAN - Free Report) has an Earnings ESP of +0.79% and a Zacks Rank of 3. ELAN has an estimated long-term growth rate of 9.1%.
Elanco Animal Health’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 19.15%.
Thermo Fisher Scientific (TMO - Free Report) has an Earnings ESP of +2.63% and a Zacks Rank of 3. TMO has an earnings yield of 4.62% against a negative yield for the industry.
Thermo Fisher Scientific’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 19.53%.
Image: Bigstock
McKesson (MCK) to Report Q2 Earnings: Is a Beat in the Cards?
McKesson Corporation (MCK - Free Report) is scheduled to report its second-quarter fiscal 2023 results on Nov 1, after the market close.
In the last reported quarter, the company delivered an earnings surprise of 9.8%. It beat estimates in three of the trailing four quarters and missed once, the average surprise being 13.00%.
Q2 Estimates
The Zacks Consensus Estimate for McKesson’s fiscal second-quarter earnings per share is pegged at $6.13, suggesting a decline of 0.3% from the prior-year quarter. The same for revenues stands at $69.66 billion, indicating an improvement of 4.6% from the year-ago reported figure.
Factors to Note
McKesson’s fiscal second-quarter results are expected to reflect segmental strength.
The U.S. Pharmaceutical and Specialty Solutions segment might have acted as a key growth driver in the quarter to be reported. The consensus mark for this segment’s revenues is pegged at $57.9 billion, indicating an improvement of 13.8% from the prior-year quarter.
The segment is likely to have benefited from market growth 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. Nevertheless, the company’s broad spectrum of specialty biopharmaceutical providers and manufacturers is expected to have contributed to the fiscal second-quarter performance.
Growth and improvement in the primary care business and contribution from kitting, storage, and distribution of ancillary supplies to the U.S. government's COVID-19 vaccine program are likely to have positively impacted the company’s Medical-Surgical solutions segment.
McKesson’s collaboration with the U.S. government's COVID-19 vaccine distribution effort highlighted the company’s role in the COVID-19 response. It was selected by the U.S. government as the centralized distributor of refrigerated and frozen COVID-19 vaccines and the ancillary kits used to administer those vaccines.
The company’s U.S. and international distribution businesses have been playing a key role in the pandemic response. Meanwhile, its growing partnership with the U.S. government's COVID-19 vaccine distribution efforts reflects operational excellence and capabilities.
In July 2022, the U.S. government renewed the existing COVID-19 vaccine distribution contract. The company continues to reap benefits from its COVID-related programs in Canada and European operations.
McKesson Corporation Price and Consensus
McKesson Corporation price-consensus-chart | McKesson Corporation Quote
These positive developments may get reflected in the fiscal second-quarter results.
Continued growth in the Medical-Surgical segment and Prescription Technology Solutions are likely to have benefited the company’s top line in the to-be-reported quarter.
Earnings Beat Likely
Our proven model predicts an earnings beat for McKesson this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($6.15 per share) and the Zacks Consensus Estimate ($6.13 per share), is +0.27%.
Zacks Rank: McKesson currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks Worth a Look
Here are a few other medical stocks worth considering, as these also have the right combination of elements to beat on earnings this reporting cycle:
Abiomed has an Earnings ESP of +4.18% and is a Zacks #3 Ranked stock. ABMD has an earnings yield of 1.87% against the industry’s yield of (9.87%).
Abiomed’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 10.89%.
Elanco Animal Health (ELAN - Free Report) has an Earnings ESP of +0.79% and a Zacks Rank of 3. ELAN has an estimated long-term growth rate of 9.1%.
Elanco Animal Health’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 19.15%.
Thermo Fisher Scientific (TMO - Free Report) has an Earnings ESP of +2.63% and a Zacks Rank of 3. TMO has an earnings yield of 4.62% against a negative yield for the industry.
Thermo Fisher Scientific’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 19.53%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.