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McKesson (MCK) to Report Q1 Earnings: Is a Beat in Store?
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McKesson Corporation (MCK - Free Report) is scheduled to report fiscal first-quarter 2024 results on Jul 28, after market close.
The company delivered an earnings surprise of 0.42% in the last reported quarter. Its earnings beat estimates in three of the trailing four quarters and missed the same once, the average surprise being 4.48%.
Q1 Estimates
The Zacks Consensus Estimate for McKesson’s earnings is pegged at $5.85 per share, implying an improvement of 0.3% from the prior-year quarter’s figure. The same for revenues is pinned at $69.91 billion, indicating a surge of 4.1% year over year.
Factors to Note
McKesson’s fiscal first-quarter results are expected to reflect segmental strength.
The U.S. Pharmaceutical and Specialty Solutions segment is likely to have acted as a key growth driver in the soon-to-be-reported quarter. Our estimate for this segment’s revenues is $62.7 billion, indicating an improvement of 10.2% from the prior-year quarter’s level.
The segment is expected to have benefited from market growth and higher volumes from retail national account customers. However, branded-to-generic conversions might have weighed on its performance. Continued demand for MCK’s broad spectrum of specialty biopharmaceutical products to health systems is likely to have contributed to its performance.
McKesson’s collaboration with the U.S. government over COVID-19 vaccine distribution highlighted its role in the COVID-19 response. However, COVID-19 tests, and kitting storage and distribution of ancillary supplies might have declined during the quarter, hurting the Medical-Surgical Solutions segment’s performance.
However, continued growth in the Prescription Technology Solutions segment is expected to have benefited the company’s top line in the to-be-reported quarter. Growth in the technology services’ revenues and an increase in prescriptions from third-party logistics are likely to have driven segmental performance.
Our top-line estimate for the Medical-Surgical and Prescription Technology Solutions segments is pegged at $2.56 billion and $1.16 billion, respectively.
Meanwhile, divesture of businesses outside the United States, especially in Europe, might have led to a loss of sales during the quarter, resulting in lower revenue growth for the International segment. Interest expenses are likely to have increased amid rising interest-rate regime, hurting the bottom line.
The price fluctuation of generic pharmaceuticals and stiff competition in the MedTech space are strong headwinds.
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.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($7.19 per share) and the Zacks Consensus Estimate ($7.16 per share), is +0.42% for McKesson. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Here are some other medical stocks worth considering as these too have the right combination of elements to post an earnings beat this reporting cycle.
AmerisourceBergen has an Earnings ESP of +0.59% and a Zacks Rank of 2 at present.
The stock has gained 12.5% year to date. ABC’s earnings beat estimates in the last reported quarter. It has a four-quarter earnings surprise of 3.14%, on average.
Becton, Dickinson and Company (BDX - Free Report) has an Earnings ESP of +0.48% and a Zacks Rank of 2 at present.
The stock has gained 10.2% year to date. BDX’s earnings missed estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 5.79%.
Pacific Biosciences of California (PACB - Free Report) has an Earnings ESP of +5.88% and a Zacks Rank of 3 at present.
The stock has gained 65% year to date. PACB’s earnings beat estimates in the last reported quarter. It has a negative four-quarter average earnings surprise of 3.66%.
Image: Bigstock
McKesson (MCK) to Report Q1 Earnings: Is a Beat in Store?
McKesson Corporation (MCK - Free Report) is scheduled to report fiscal first-quarter 2024 results on Jul 28, after market close.
The company delivered an earnings surprise of 0.42% in the last reported quarter. Its earnings beat estimates in three of the trailing four quarters and missed the same once, the average surprise being 4.48%.
Q1 Estimates
The Zacks Consensus Estimate for McKesson’s earnings is pegged at $5.85 per share, implying an improvement of 0.3% from the prior-year quarter’s figure. The same for revenues is pinned at $69.91 billion, indicating a surge of 4.1% year over year.
Factors to Note
McKesson’s fiscal first-quarter results are expected to reflect segmental strength.
The U.S. Pharmaceutical and Specialty Solutions segment is likely to have acted as a key growth driver in the soon-to-be-reported quarter. Our estimate for this segment’s revenues is $62.7 billion, indicating an improvement of 10.2% from the prior-year quarter’s level.
The segment is expected to have benefited from market growth and higher volumes from retail national account customers. However, branded-to-generic conversions might have weighed on its performance. Continued demand for MCK’s broad spectrum of specialty biopharmaceutical products to health systems is likely to have contributed to its performance.
McKesson’s collaboration with the U.S. government over COVID-19 vaccine distribution highlighted its role in the COVID-19 response. However, COVID-19 tests, and kitting storage and distribution of ancillary supplies might have declined during the quarter, hurting the Medical-Surgical Solutions segment’s performance.
However, continued growth in the Prescription Technology Solutions segment is expected to have benefited the company’s top line in the to-be-reported quarter. Growth in the technology services’ revenues and an increase in prescriptions from third-party logistics are likely to have driven segmental performance.
Our top-line estimate for the Medical-Surgical and Prescription Technology Solutions segments is pegged at $2.56 billion and $1.16 billion, respectively.
Meanwhile, divesture of businesses outside the United States, especially in Europe, might have led to a loss of sales during the quarter, resulting in lower revenue growth for the International segment. Interest expenses are likely to have increased amid rising interest-rate regime, hurting the bottom line.
The price fluctuation of generic pharmaceuticals and stiff competition in the MedTech space are strong headwinds.
McKesson Corporation Price and Consensus
McKesson Corporation price-consensus-chart | McKesson Corporation Quote
Expected Earnings Beat
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.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($7.19 per share) and the Zacks Consensus Estimate ($7.16 per share), is +0.42% for McKesson. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
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 to Consider
Here are some other medical stocks worth considering as these too have the right combination of elements to post an earnings beat this reporting cycle.
AmerisourceBergen has an Earnings ESP of +0.59% and a Zacks Rank of 2 at present.
The stock has gained 12.5% year to date. ABC’s earnings beat estimates in the last reported quarter. It has a four-quarter earnings surprise of 3.14%, on average.
Becton, Dickinson and Company (BDX - Free Report) has an Earnings ESP of +0.48% and a Zacks Rank of 2 at present.
The stock has gained 10.2% year to date. BDX’s earnings missed estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 5.79%.
Pacific Biosciences of California (PACB - Free Report) has an Earnings ESP of +5.88% and a Zacks Rank of 3 at present.
The stock has gained 65% year to date. PACB’s earnings beat estimates in the last reported quarter. It has a negative four-quarter average earnings surprise of 3.66%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.