Benzinga | May 5, 2021 10:05AM EDT

Earnings Preview for McKesson

On Thursday, May 06, McKesson (NYSE:MCK) will release its latest earnings report. Check out Benzinga's preview to understand the implications.

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

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

Wall Street expects EPS of $5.04 and sales around $61.09 billion. McKesson EPS in the same period a year ago totaled $4.27. Sales were $58.53 billion.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the "consensus estimates." A company posting earnings or revenue above or below the consensus estimate is known as an "earnings surprise" and may move the stock by a considerable margin.

If the company were to match the consensus estimate when it reports Thursday, EPS would be up 18.03%. Revenue would be have grown 4.36% from the same quarter last year. Here is how the company's reported EPS has stacked up against analyst estimates in the past: Quarter Q3 2021 Q2 2020 Q1 2020 Q4 2020EPS Estimate 4.13 3.87 2.30 4.08EPS Actual 4.60 4.80 2.77 4.27Revenue Estimate 61.71 B 59.42 B 53.85 B 55.58 BRevenue Actual 62.60 B 60.81 B 55.68 B 58.53 B

Stock Performance

Shares of McKesson were trading at $193.48 as of May 04. Over the last 52-week period, shares are up 38.65%. Given that these returns are generally positive, long-term shareholders should be content 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 16:30:00 ET and can be accessed here.