McKesson Corp Earnings: Profitable Quarter Accelerates Growth

S&P 500 (NYSE:SPY) component McKesson Corporation (NYSE:MCK) reported its results for the fourth quarter. McKesson delivers cost-reducing medicines, pharmaceutical supplies, information, and care management products and services.

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McKesson Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for McKesson Corporation rose to $521 million ($2.09 per share) vs. $422 million ($1.62 per share) in the same quarter a year earlier. This marks a rise of 23.5% from the year-earlier quarter.

Revenue: Rose 9.9% to $31.7 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: McKesson Corporation beat the mean analyst estimate of $2.06 per share. It beat the average revenue estimate of $30.4 billion.

Quoting Management: “I am pleased with our fourth-quarter results led by solid execution in our Distribution Solutions businesses. For the full year, we had strong growth in both earnings and cash flow driven by our portfolio of solutions across healthcare,” said John H. Hammergren, chairman and chief executive officer.

Key Stats:

The company has now topped analyst estimates for the last four quarters. It beat the mark by 2 cents in the third quarter, by 25 cents in the second quarter, and by 13 cents in the first quarter.

Gross margin shrank 0.2 percentage point to 5.8%. The contraction appeared to be driven by increased costs, which rose 10.2% from the year earlier quarter while revenue rose 9.9%.

Revenue has increased for four quarters in a row. Revenue increased 9.2% to $30.84 billion in the third quarter. The figure rose 9.7% in the second quarter from the year earlier and climbed 9.2% in the first quarter from the year-ago quarter.

Net income has increased 25% year-over-year on average across the last five quarters. The biggest gain came in the third, when income climbed 93.5% from the year-earlier quarter.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the first quarter of the next fiscal year has moved up from $1.48 a share to $1.50 over the last sixty days. Over the past three months, the average estimate for the fiscal year has climbed from $6.33 per to share to $6.35.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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