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McKesson (MCK) to Report Q1 Earnings: What's in the Cards?
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McKesson Corporation (MCK - Free Report) is scheduled to report first-quarter fiscal 2023 results on Aug 3, after market close.
The company delivered a negative earnings surprise of 3.8% in the last reported quarter. However, it beat estimates in three of the trailing four quarters and missed the same once, the average surprise being 19.54%.
Q1 Estimates
The Zacks Consensus Estimate for McKesson’s fiscal first-quarter earnings per share is pegged at $531, suggesting a decline of 4.5% from the prior-year quarter. The same for revenues stands at $63.87 billion, indicating an improvement of 1.9% 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 $52.7 billion, indicating an improvement of 5.4% 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.
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 United States government's COVID-19 vaccine distribution efforts reflects operational excellence and capabilities.
In January 2022, the United States government extended the existing COVID-19 vaccine distribution contract through July 2022 (approximately in line with McKesson’s fiscal first quarter of 2023). The company’s continues to reap benefits from COVID-related programs in Canada and European operations.
These positive developments may get reflected in the fiscal first-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 soon-to-be reported quarter.
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 chances of an earnings beat. That is not the case here as you will see.
Earnings ESP: McKesson has an Earnings ESP of -0.41%. 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.
Stocks Worth a Look
Here are a few medical stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle:
Centessa Pharmaceuticals plc (CNTA - Free Report) has an Earnings ESP of +2.70% and a Zacks Rank of 2. CNTA has an estimated growth rate of 20.6% for 2023.
Centessa Pharmaceuticals’earnings surpassed estimates in two of the trailing four quarters and lagged the same in the other two, with the average being 6.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.
STERIS plc (STE - Free Report) has an Earnings ESP of +1.85% and is a Zacks #1 Rank stock. STE has an estimated growth rate of 9.9% for fiscal 2023.
STERIS’ earnings surpassed estimates in all the trailing four quarters, with the average surprise being 9.2%.
GoodRx Holdings, Inc. (GDRX - Free Report) has an Earnings ESP of +20.00% and is a Zacks #2 Ranked stock. GDRX has an estimated long-term growth rate of 16.6%.
GoodRxHoldings’earnings surpassed estimates in two of the trailing four quarters, lagged the same in one and broke even in one, the average being 6.9%.
Image: Bigstock
McKesson (MCK) to Report Q1 Earnings: What's in the Cards?
McKesson Corporation (MCK - Free Report) is scheduled to report first-quarter fiscal 2023 results on Aug 3, after market close.
The company delivered a negative earnings surprise of 3.8% in the last reported quarter. However, it beat estimates in three of the trailing four quarters and missed the same once, the average surprise being 19.54%.
Q1 Estimates
The Zacks Consensus Estimate for McKesson’s fiscal first-quarter earnings per share is pegged at $531, suggesting a decline of 4.5% from the prior-year quarter. The same for revenues stands at $63.87 billion, indicating an improvement of 1.9% 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 $52.7 billion, indicating an improvement of 5.4% 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.
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 United States government's COVID-19 vaccine distribution efforts reflects operational excellence and capabilities.
In January 2022, the United States government extended the existing COVID-19 vaccine distribution contract through July 2022 (approximately in line with McKesson’s fiscal first quarter of 2023). The company’s continues to reap benefits from COVID-related programs in Canada and European operations.
These positive developments may get reflected in the fiscal first-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 soon-to-be reported quarter.
McKesson Corporation Price and Consensus
McKesson Corporation price-consensus-chart | McKesson Corporation Quote
What Our Quantitative Model Suggests
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 chances of an earnings beat. That is not the case here as you will see.
Earnings ESP: McKesson has an Earnings ESP of -0.41%. 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.
Stocks Worth a Look
Here are a few medical stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle:
Centessa Pharmaceuticals plc (CNTA - Free Report) has an Earnings ESP of +2.70% and a Zacks Rank of 2. CNTA has an estimated growth rate of 20.6% for 2023.
Centessa Pharmaceuticals’earnings surpassed estimates in two of the trailing four quarters and lagged the same in the other two, with the average being 6.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.
STERIS plc (STE - Free Report) has an Earnings ESP of +1.85% and is a Zacks #1 Rank stock. STE has an estimated growth rate of 9.9% for fiscal 2023.
STERIS’ earnings surpassed estimates in all the trailing four quarters, with the average surprise being 9.2%.
GoodRx Holdings, Inc. (GDRX - Free Report) has an Earnings ESP of +20.00% and is a Zacks #2 Ranked stock. GDRX has an estimated long-term growth rate of 16.6%.
GoodRxHoldings’earnings surpassed estimates in two of the trailing four quarters, lagged the same in one and broke even in one, the average being 6.9%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.