McKesson
The 10-second takeaway
For the quarter ended June 30 (Q1), McKesson met expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share grew significantly. GAAP earnings per share expanded significantly.
Margins grew across the board.
Revenue details
McKesson notched revenue of $32.21 billion. The 12 analysts polled by S&P Capital IQ expected sales of $32.50 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 details
EPS came in at $2.07. The 14 earnings estimates compiled by S&P Capital IQ averaged $1.70 per share. Non-GAAP EPS of $2.07 for Q1 were 34% higher than the prior-year quarter's $1.55 per share. GAAP EPS of $1.83 for Q1 were 16% higher than the prior-year quarter's $1.58 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
Margin details
For the quarter, gross margin was 6.0%, 80 basis points better than the prior-year quarter. Operating margin was 2.1%, 40 basis points better than the prior-year quarter. Net margin was 1.3%, 10 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Looking ahead
Next quarter's average estimate for revenue is $32.52 billion. On the bottom line, the average EPS estimate is $2.04.
Next year's average estimate for revenue is $131.44 billion. The average EPS estimate is $8.13.
Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 625 members out of 650 rating the stock outperform, and 25 members rating it underperform. Among 238 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 231 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 $123.87.
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