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McKesson Earnings Preview

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McKesson (NYSE:MCK) announces its next round of earnings this Tuesday, February 02. Here is Benzinga's everything-that-matters guide for this Tuesday's Q3 earnings announcement.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.

Earnings And Revenue

McKesson EPS is expected to be around $4.11, according to sell-side analysts. Sales will likely be near $61.73 billion. McKesson reported a profit of $3.81 per share when it published results during the same quarter last year. Sales in that period totaled $59.17 billion.

Why Analyst Estimates And Earnings Surprises Are Important

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

If the company were to match the consensus estimate when it reports Tuesday, earnings would be up 7.87%. Revenue would be have grown 4.32% from the same quarter last year. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2020
EPS Estimate 3.87 2.30 4.08 3.56
EPS Actual 4.80 2.77 4.27 3.81
Revenue Estimate 59.42 B 53.85 B 55.58 B 59.36 B
Revenue Actual 60.81 B 55.68 B 58.53 B 59.17 B

Stock Performance

Shares of McKesson were trading at $174.65 as of January 29. Over the last 52-week period, shares are up 19.59%. Given that these returns are generally positive, long-term shareholders are probably satisfied going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. McKesson is scheduled to hold the call at 08:00:00 ET and can be accessed here.

 

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Posted-In: BZI-EPEarnings