The 10-second takeaway
For the quarter ended March 31 (Q4), McKesson missed estimates on revenues and whiffed on earnings per share.
Compared to the prior-year quarter, revenue contracted. Non-GAAP earnings per share shrank significantly. GAAP earnings per share dropped significantly.
Gross margins grew, operating margins were steady, net margins contracted.
McKesson logged revenue of $30.62 billion. The 13 analysts polled by S&P Capital IQ expected a top line of $32.01 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.
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 $1.45. The 16 earnings estimates compiled by S&P Capital IQ averaged $2.30 per share. Non-GAAP EPS of $1.45 for Q4 were 31% lower than the prior-year quarter's $2.09 per share. GAAP EPS of $1.10 for Q4 were 47% lower than the prior-year quarter's $2.08 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 6.5%, 70 basis points better than the prior-year quarter. Operating margin was 2.1%, much about the same as the prior-year quarter. Net margin was 0.8%, 80 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $32.62 billion. On the bottom line, the average EPS estimate is $1.66.
Next year's average estimate for revenue is $131.25 billion. The average EPS estimate is $8.01.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 617 members out of 644 rating the stock outperform, and 27 members rating it underperform. Among 221 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 213 give McKesson a green thumbs-up, and eight 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 $117.23.
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