Earnings Preview: McKesson's EPS, Revenue Expected to Rise

McKesson MCK announces its next round of earnings this Tuesday, October 25, 2011. Get the latest predictions in Benzinga's essential guide to the company's second quarter earnings report.

Earnings and Revenue:

Based on estimates, investors are readying for a positive EPS reading of $1.39/share and revenues of $29.5 billion. McKesson's latest numbers will no doubt be compared with the company's year-ago quarter, when it reported a profit of $1.03/share on revenues of $27.53 billion. Can McKesson manage the estimated 35% rise in EPS and 7.2% increase in revenues from the year-ago quarter as analysts are predicting? We'll have to wait until Tuesday to find out.

Here's how the company's reported EPS has stacked up against analyst estimates in the past:

Quarter	Q1	Q4	Q3	Q2
EPS Estimate	$1.14	$1.60	$1.11	$1.09
EPS Actual	$1.27	$1.66	$1.12	$1.03

Stock Performance:

Shares of McKesson were trading at $73.19 as of October 19, 2011. Since January 1st, shares of McKesson have given investors a return of 4.8%. For a full 12 months, the return has risen by 13%. Given that these returns are generally positive, long-term shareholders are probably satisfied going into this earnings release.

• Long-term shareholders are already enjoying 12-month gains prior to the announcement

Average Stock Rating:

The average rating by analysts for McKesson is a Moderate Buy. Over the past three months this rating's strength has declined slightly.

Competitors:

Looking for a sympathy stock to trade or interested in the performance of other companies in the same sector? Take a look at some of McKesson's peers.

• AmerisourceBergen ABC: Moderate Buy with a $0.61 recent quarter EPS
• Cardinal Health CAH: Moderate Buy with a $0.59 recent quarter EPS
• Cerner CERN: Moderate Buy with a $0.42 recent quarter EPS
• Henry Schein HSIC: Hold with a $1.01 recent quarter EPS

McKesson is in the retail-drug stores industry, which has experienced price/earnings growth of 1.5%.

Finally, a description of the company's main areas of operation: McKesson delivers cost-reducing medicines, pharmaceutical supplies, information, and care management products and services.

Take Action:

That's your advanced look at McKesson's upcoming earnings numbers -- be ready to take quick action if the company's report contains any surprises. Also, check back in with us after the announcement for a full recap and what-to-do-next guide.

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