McKesson (MCK) Tops Q3 EPS by 47c, Beats on Revenues; Offers FY18 EPS Guidance Above Consensus

McKesson (NYSE: MCK) reported Q3 EPS of $3.41, $0.47 better than the analyst estimate of $2.94. Revenue for the quarter came in at $53.6 billion versus the consensus estimate of $51.98 billion.

• Revenues of $53.6 billion for the third quarter, up 7% year-over-year.
• Third-quarter GAAP earnings per diluted share from continuing operations of $4.32, up 51% year-over-year. GAAP earnings per diluted share included a net tax benefit of approximately $370 million, or $1.78, related to the Tax Cuts and Jobs Act of 2017.
• Third-quarter Adjusted Earnings per diluted share of $3.41, up 12% year-over-year, compared to $3.04 in the prior year.
• Fiscal 2018 Outlook: GAAP earnings per diluted share from continuing operations of $7.65 to $9.00.
• Fiscal 2018 Outlook: Adjusted Earnings of $12.50 to $12.80 per diluted share.

Fiscal Year 2018 Outlook

McKesson expects GAAP earnings per diluted share of $7.65 to $9.00 for the fiscal year ending March 31, 2018, which includes the following items:

• Amortization of acquisition-related intangibles of $2.35 to $2.65 per diluted share;
• Acquisition-related expenses and adjustments of $1.00 to $1.20 per diluted share;
• Last-In-First-Out (“LIFO”) inventory-related charges of five cents to credits of five cents per diluted share;
• Gains from antitrust legal settlements of up to five cents per diluted share;
• Restructuring charges of $1.25 to $1.45 per diluted share; and
• Other adjustments resulting in credits of $0.50 to $0.70 per diluted share.

GUIDANCE:

McKesson sees FY2018 EPS of $12.50-$12.80, versus the consensus of $12.25.

For earnings history and earnings-related data on McKesson (MCK) click here.

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