McKesson (MCK) to Report Q1 Earnings: What's in the Offing?
McKesson Corporation’s MCK first-quarter fiscal 2022 results are scheduled to release on Aug 4, before the opening bell.
The company delivered an earnings surprise of 0.6% in the last reported quarter. It beat estimates in each of the trailing four quarters, the average surprise being 13.5%.
Q1 Estimates
The Zacks Consensus Estimate for McKesson’s fiscal first-quarter earnings per share is pegged at $4.05, suggesting growth of 46.2% from the prior-year quarter. The same for revenues stands at $59.60 billion, indicating an improvement of 7% 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 might have acted as a key growth driver in the quarter to be reported. In fact, the consensus mark for this segment’s revenues is pegged at $47.46 billion, indicating an improvement of 5.3% from the prior-year quarter.
The segment may 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. Nonetheless, the company’s broad spectrum of specialty biopharmaceutical providers and manufacturers is expected to have contributed to the fiscal first-quarter performance.
Growing demand for COVID-19 tests and personal protective equipment (PPE) in the Primary Care and Extended businesses is likely to have favored the company’s Medical-Surgical solutions segment. The consensus mark for this segment’s revenues is pegged at $2.39 billion, indicating an improvement of 32.5% from the prior-year quarter.
McKesson Corporation Price and EPS Surprise
McKesson Corporation price-eps-surprise | McKesson Corporation Quote
The company’s role in the COVID-19 response was reflected in the collaboration with the U.S. government's COVID-19 vaccine distribution effort, wherein McKesson was selected as the centralized distributor of refrigerated and frozen COVID-19 vaccines and the ancillary kits used to administer those vaccines.
Per the fiscal-fourth quarter 2021 earnings call, the company is prepared to support the distribution of additional vaccines as they come to market. Through April, McKesson has successfully distributed above 150 million Moderna and J&J COVID-19 vaccines to administration sites in the United States and remains on track with the U.S. government's distribution schedule.
Additionally, through April, the company has managed to assemble enough kits to support the administration of more than 550 million doses for all vaccine types.
These positive developments may get reflected in the fiscal first-quarter results.
With respect to the company’s corporate segment, opioid-related costs are expected to be around $155 million for fiscal 2022. Given the higher opioid-related costs and increased investment in the business, the company now estimates corporate expenses between $670 million and $720 million. Consequently, the fiscal first quarter is likely to reflect the impact of the same.
What the Zacks Model Unveils
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. That’s the case here.
Earnings ESP: McKesson has an Earnings ESP of +9.28%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company carries a Zacks Rank #3.
Other Stocks Worth a Look
Here are some other medical stocks worth considering as these too have the right combination of elements to post an earnings beat this quarter.
HillRom Holdings, Inc. HRC has an Earnings ESP of +0.56% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita Inc. DVA has an Earnings ESP of +0.47% and a Zacks Rank of 3.
Avanos Medical, Inc. AVNS has an Earnings ESP of +15.72% and a Zacks Rank of 3.
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McKesson Corporation (MCK) : Free Stock Analysis Report
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AVANOS MEDICAL, INC. (AVNS) : Free Stock Analysis Report
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