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McKesson Second Quarter Earnings Preview
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MCK
McKesson (NYSE:MCK) is scheduled to announce its second quarter earnings on Thursday, October 25, 2012.
A business' earnings are the main determinant of its share price because earnings and the circumstances relating to them can indicate whether the business will be profitable and successful in the long run. SEE: Everything Investors Need To Know About Earnings
What to Expect: The consensus estimate for McKesson's earnings is $1.76 per share, up 8% from a year ago when the company reported earnings of $1.63 per share.
Over the past month, the consensus estimate has risen from $1.75, but it is under the estimate of $1.77 from three months ago. For the fiscal year, analysts are projecting earnings of $7.26 per share.
Revenue is expected to exceed last year's figure of $30.22 billion by 2.2% and come in at $30.88 billion for the quarter. Revenue for the fiscal year is expected to come in at $125.14 billion.
Company Performance: These last four quarters have marked revenue growth. It rose 2.7% in the first quarter, 9.9% in the fourth quarter of the last fiscal year, 9.2% in the third quarter of the last fiscal year and 9.7% in the second quarter of the last fiscal year.
The P/E ratio for MCK is 14.9, above the industry average of 1.94. Usually, if a stock has a high P/E ratio, it indicates that the market expects the company to grow earnings quickly in the future. Perhaps one of the most widely-used stock analysis tools is the price-to-earnings ratio, or P/E. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: Can Investors Trust the P/E Ratio?
The stock price has fallen 2.8% since July 24, 2012, from $92.77 to $90.20. McKesson's best recent streak was when its price gained $3.17 per share between October 12, 2012 and October 16, 2012.
The Competition: McKesson delivers cost-reducing medicines, pharmaceutical supplies, information, and care management products and services. The majority of analysts (eight of 13) rate McKesson a buy. This marks a small improvement, as the number of buy ratings has risen slightly over the past three months.
The company's closest competitor in the biotechnology and drugs industry is Cardinal Health (CAH). Analysts are less optimistic about McKesson than about Cardinal Health. Ten out of 12 analysts rate the latter a buy.
A business' earnings are the main determinant of its share price because earnings and the circumstances relating to them can indicate whether the business will be profitable and successful in the long run. SEE: Everything Investors Need To Know About Earnings
What to Expect: The consensus estimate for McKesson's earnings is $1.76 per share, up 8% from a year ago when the company reported earnings of $1.63 per share.
Over the past month, the consensus estimate has risen from $1.75, but it is under the estimate of $1.77 from three months ago. For the fiscal year, analysts are projecting earnings of $7.26 per share.
Revenue is expected to exceed last year's figure of $30.22 billion by 2.2% and come in at $30.88 billion for the quarter. Revenue for the fiscal year is expected to come in at $125.14 billion.
Company Performance: These last four quarters have marked revenue growth. It rose 2.7% in the first quarter, 9.9% in the fourth quarter of the last fiscal year, 9.2% in the third quarter of the last fiscal year and 9.7% in the second quarter of the last fiscal year.
The stock price has fallen 2.8% since July 24, 2012, from $92.77 to $90.20. McKesson's best recent streak was when its price gained $3.17 per share between October 12, 2012 and October 16, 2012.
The Competition: McKesson delivers cost-reducing medicines, pharmaceutical supplies, information, and care management products and services. The majority of analysts (eight of 13) rate McKesson a buy. This marks a small improvement, as the number of buy ratings has risen slightly over the past three months.
The company's closest competitor in the biotechnology and drugs industry is Cardinal Health (CAH). Analysts are less optimistic about McKesson than about Cardinal Health. Ten out of 12 analysts rate the latter a buy.
by
Investopedia Staff
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