The 10-second takeaway
For the quarter ended March 31 (Q4), McKesson beat expectations on revenues and beat slightly on earnings per share.
Compared to the prior-year quarter, revenue increased and GAAP earnings per share expanded significantly.
Gross margins shrank, operating margins improved, and net margins improved.
McKesson reported revenue of $31.70 billion. The 12 analysts polled by S&P Capital IQ hoped for revenue of $30.39 billion on the same basis. GAAP reported sales were 9.9% higher than the prior-year quarter's $28.85 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $2.09. The 13 earnings estimates compiled by S&P Capital IQ averaged $2.04 per share. GAAP EPS of $2.09 for Q4 were 30% higher than the prior-year quarter's $1.61 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 5.8%, 30 basis points worse than the prior-year quarter. Operating margin was 2.2%, 10 basis points better than the prior-year quarter. Net margin was 1.6%, 10 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $30.57 billion. On the bottom line, the average EPS estimate is $1.45.
Next year's average estimate for revenue is $123.41 billion. The average EPS estimate is $7.08.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 584 members out of 607 rating the stock outperform, and 23 members rating it underperform. Among 199 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 192 give McKesson a green thumbs-up, and seven give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on McKesson is outperform, with an average price target of $95.97.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of McKesson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.