McKesson Corporation MCK is scheduled to report fiscal fourth-quarter 2023 results on May 8, after market close.

The company delivered an earnings surprise of 8.8% in the last reported quarter. Its earnings beat estimates in two of the trailing four quarters and missed the same twice, the average surprise being 3.42%.

Q4 Estimates

The Zacks Consensus Estimate for McKesson’s earnings is pegged at $7.16 per share, implying an improvement of 22.8% from the prior-year quarter’s figure. The same for revenues stands at $68.18 billion, indicating a surge of 3.1% from the year-ago reported number.

Factors to Note

McKesson’s fiscal fourth-quarter results are expected to reflect segmental strength.

The U.S. Pharmaceutical and Specialty Solutions segment is likely to have acted as a key growth driver in the soon-to-be-reported quarter. The consensus mark for this segment’s revenues stands at $60.6 billion, indicating an improvement of 13% from the prior-year quarter’s level.

The segment is expected to have benefited from market growth and higher volumes from retail national account customers. However, branded-to-generic conversions might have weighed on its performance. MCK’s broad spectrum of specialty biopharmaceutical providers and manufacturers is likely to have contributed to its performance.

Growth and improvement in the primary care business, and contribution from kitting, storage and distribution of ancillary supplies to the U.S. government's COVID-19 vaccine program are likely to have positively impacted the Medical-Surgical Solutions segment.

McKesson’s collaboration with the U.S. government over COVID-19 vaccine distribution highlighted its role in the COVID-19 response. However, COVID-19 tests, and kitting storage and distribution of ancillary supplies might have declined during the quarter.

Continued growth in the Medical-Surgical and Prescription Technology Solutions segments is expected to have benefited the company’s top line in the to-be-reported quarter. Growth in the primary care business and higher technology services revenues are likely to have driven segmental performance.

McKesson Corporation Price and Consensus

McKesson Corporation price-consensus-chart | McKesson Corporation Quote

The top-line estimates for Medical-Surgical segment and Prescription Technology Solutions segment are pegged at $2.8 billion and $1.1 billion, respectively.

Meanwhile, divesture of businesses outside the United States, especially in Europe, might have led to loss of sales during quarter, resulting in lower revenue growth. Interest expenses are likely to have increased amid rising interest-rate regime, hurting the bottom line.