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McKesson's Second Quarter Earnings Report
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MCK
McKesson (NYSE:MCK) announced its results for the second quarter on October 25, 2012. McKesson delivers cost-reducing medicines, pharmaceutical supplies, information, and care management products and services.
Earnings play an important role in measuring the appropriate valuation for a stock. Investors should be cautious if the company's stock price is high but it consistently has low earnings. SEE: Earnings: Quality Means Everything
The Numbers: McKesson posted an EPS above analyst expectations, despite revenues falling short of predictions. The company reported $1.67 per share versus the $1.49 per share estimate and revenues of $29.85 billion versus the $31.06 billion estimate. EPS rose 41.5% while revenue declined 1.2% from the same period last year. Slumping revenue in the last quarter ends McKesson's streak of four consecutive quarters of revenue increases. McKesson reported net income of $401 million during the second quarter. This is 35.5% higher than the year-ago quarter. Last quarter marked the third in a row of rising net income.
Management Quote: "McKesson delivered another quarter of solid operating performance," said John H. Hammergren, chairman and chief executive officer. "I am pleased with our accomplishments during the first half of our fiscal year. Based on our performance to date, we are updating our previous outlook for the fiscal year and now expect Adjusted Earnings per diluted share of $7.15 to $7.35 for the fiscal year ending March 31, 2013."
A Look Back: Net income has increased 35.2% year-over-year on average across the last five quarters. The biggest gain came in the third quarter of the last fiscal year, when income climbed 93.5% from the year-earlier quarter.
Looking Ahead: Expectations for the company's next-quarter results are lower than they have been. Over the past 60 days, the average estimate for third quarter has fallen from $1.78 per share to $1.77. Decreasing earnings estimates is generally a negative sign as it suggests analyst believe future earnings to be weaker than previously anticipated. For the fiscal year, the average estimate has moved up from $7.18 a share to $7.23 over the last ninety days.
Earnings play an important role in measuring the appropriate valuation for a stock. Investors should be cautious if the company's stock price is high but it consistently has low earnings. SEE: Earnings: Quality Means Everything
The Numbers: McKesson posted an EPS above analyst expectations, despite revenues falling short of predictions. The company reported $1.67 per share versus the $1.49 per share estimate and revenues of $29.85 billion versus the $31.06 billion estimate. EPS rose 41.5% while revenue declined 1.2% from the same period last year. Slumping revenue in the last quarter ends McKesson's streak of four consecutive quarters of revenue increases. McKesson reported net income of $401 million during the second quarter. This is 35.5% higher than the year-ago quarter. Last quarter marked the third in a row of rising net income.
Management Quote: "McKesson delivered another quarter of solid operating performance," said John H. Hammergren, chairman and chief executive officer. "I am pleased with our accomplishments during the first half of our fiscal year. Based on our performance to date, we are updating our previous outlook for the fiscal year and now expect Adjusted Earnings per diluted share of $7.15 to $7.35 for the fiscal year ending March 31, 2013."
A Look Back: Net income has increased 35.2% year-over-year on average across the last five quarters. The biggest gain came in the third quarter of the last fiscal year, when income climbed 93.5% from the year-earlier quarter.
Looking Ahead: Expectations for the company's next-quarter results are lower than they have been. Over the past 60 days, the average estimate for third quarter has fallen from $1.78 per share to $1.77. Decreasing earnings estimates is generally a negative sign as it suggests analyst believe future earnings to be weaker than previously anticipated. For the fiscal year, the average estimate has moved up from $7.18 a share to $7.23 over the last ninety days.
by
Investopedia Staff
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