Stock Monitor: Cardinal Health Post Earnings Reporting

LONDON, UK / ACCESSWIRE / November 28, 2017 / Active-Investors' free earnings report on McKesson Corp. (NYSE: MCK) has freshly been issued to its members. You can also sign up to view this report at www.active-investors.com/registration-sg/?symbol=MCK. McKesson reported its second quarter fiscal 2018 operating results on October 26, 2017. The Drug wholesaler exceeded top- and bottom-line expectations and provided earnings guidance for FY18. Register today and get free access to our complimentary member's area, where many more reports are available: www.active-investors.com/registration-sg.

Active-Investors.com is currently working on the research report for Cardinal Health, Inc. (NYSE: CAH), which also belongs to the Services sector as the Company McKesson. Do not miss out, become a member today for free to access this upcoming report at: www.active-investors.com/registration-sg/?symbol=CAH.

Active-Investors.com is focused on giving you timely information and the inside line on companies that matter to you. This morning, McKesson's most recent news is on our radar and we have decided to include it in our blog post. Today's free coverage is available at: www.active-investors.com/registration-sg/?symbol=MCK.

Earnings Highlights and Summary

McKesson (NYSE: MCK) reported that revenues for the second quarter ended September 30, 2017, were $52.1 billion, up 4% compared to $50.0 billion in Q2 FY17. The Company's revenue numbers topped analysts' estimates of $51.73 million.

On a GAAP basis, McKesson's earnings per diluted share from continuing operations was $0.01 in Q2 FY18 compared to $1.35 in Q2 FY17. During the reported quarter, McKesson initiated a number of strategic and operational actions within its UK retail pharmacy business in response to the UK government reimbursement reductions. As a result, the Company's GAAP earnings per diluted share for Q2 FY18 included $2.41 of non-cash goodwill and other long-lived asset impairment charges and $0.19 of restructuring charges.

McKesson's Q2 FY18 adjusted earnings per diluted share was $3.28, up 11% compared to earnings of $2.96 in Q2 FY17, driven by organic growth across multiple business units, including the Company's strategic sourcing benefits through ClarusONE, a lower share count and incremental profit contribution from acquisitions. The Company's earnings beat Wall Street's estimates of $2.80 per share.

McKesson's Segment Results

The Distribution Solutions' revenues were $51.9 billion for Q2 FY18, up 5% both on a reported and on a constant currency basis. In the reported quarter, Distribution Solutions' GAAP operating profit was $388 million and GAAP operating margin was 0.75%. The segment's reported quarter adjusted operating profit was $1.0 billion, up 13% from the prior year on a reported basis and 12% on a constant currency basis.

For Q2 FY18, the North America pharmaceutical distribution and services' revenues totaled $43.5 billion, up 5% both on a reported and on a constant currency basis, primarily reflecting market growth and acquisitions. International pharmaceutical distribution and services revenues were $6.8 billion for the reported quarter, up 8% on a reported basis and 4% on a constant currency basis, driven by acquisitions and market growth.

For Q2 FY18, the Medical-Surgical distribution and services revenues totaled $1.7 billion, up 2%, primarily driven by market growth. The Company's Technology Solutions revenues were down 82% on both a reported and a constant currency basis in the reported quarter, following the contribution of the majority of McKesson's Technology Solutions businesses to the Change Healthcare joint venture on March 01, 2017. Technology Solutions' GAAP operating loss was $33 million for the reported quarter, while adjusted operating profit was $92 million, primarily reflecting the Company's equity share of Change Healthcare's net income.

Cash Matters

For H1 FY18, McKesson generated cash from operations of $1.3 billion and ended Q2 FY18 with cash and cash equivalents of $2.6 billion. During H1 FY18, the Company repaid $545 million in long-term debt, paid $1.9 billion for acquisitions, repurchased $650 million of its common stock, invested $255 million internally, and paid $121 million in dividends.

McKesson's Board of Directors declared a regular dividend of $0.34 per share of common stock. The dividend will be payable on January 02, 2018, to stockholders of record on December 01, 2017.

Outlook

McKesson expects GAAP earnings per diluted share of $4.80 to $6.90 for the fiscal year ending March 31, 2018. The Company is estimating amortization of acquisition-related intangibles of $2.40 to $2.70 per diluted share; acquisition-related expenses and adjustments of $0.90 to 1.10 per diluted share; restructuring charges of $1.10 to $1.40 per diluted share; and other adjustments of $1.40 to $1.60 per diluted share.

McKesson is projecting adjusted earnings of $11.80 to $12.50 per diluted share for FY18.

Stock Performance Snapshot

November 27, 2017 - At Monday's closing bell, McKesson's stock slightly climbed 0.13%, ending the trading session at $144.85.

Volume traded for the day: 1.82 million shares.

Stock performance in the last month - up 0.91%; past twelve-month period - up 1.24%; and year-to-date - up 3.13%

After yesterday's close, McKesson's market cap was at $30.44 billion.

Price to Earnings (P/E) ratio was at 6.86.

The stock has a dividend yield of 0.94%.

The stock is part of the Services sector, categorized under the Drugs Wholesale industry.

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