McKesson Beats Expectations for 4Q, Warns of Covid-19 Challenges Ahead

By Micah Maidenberg

McKesson Corp. warned that it believes a key profit metric will slip and revenue growth will slow in its new fiscal year as the drug distributor wrestles with the Covid-19 pandemic.

Net income in the fiscal fourth quarter that ended in March rose to $1.02 billion, or $5.85 a share, from a loss of $796 million, or $4.17 a share, in the comparable period.

After adjustments, earnings per share rose to $4.27, surpassing the $4.10 a share consensus estimate, according to FactSet.

McKesson reported $58.54 billion in revenue, up 12% compared with the same quarter in 2019 and higher than the $55.54 billion that analysts expected, according to FactSet.

For its year that ended March 31, the company said it earned $14.95 a share in adjusted earnings. Revenue grew 8% year over year.

Looking ahead, McKesson said Wednesday it expects earnings, following adjustments, of $13.95 to $14.75 a share for its fiscal 2021 year and revenue growth of 2% to 4% during the period.

The new profit forecast "reflects anticipated headwinds in fiscal 2021 as a result of the Covid-19 pandemic and a continuation of disciplined, efficient capital deployment, including investments in the business," McKesson said.

The coronavirus has created some challenges for companies with businesses tied to pharmaceuticals. Executives at CVS Health Corp. said this month that new drug therapy starts dropped in April compared with the year before as Covid-19 kept patients from seeing their doctors.

Write to Micah Maidenberg at [e-mail]

(END) Dow Jones Newswires

May 20, 2020 07:49 ET (11:49 GMT)

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