Earnings Analysis for MCK for the Last 3 Years
1. Revenue Analysis
Focusing on Total Revenue, Operating Revenue, and Gross Profit, MCK showed a consistent upward trend in revenue and gross profits over the periods analyzed:
- Total Revenue increased from $68.91 billion in Q1 2023 to $80.90 billion in Q4 2023.
- Operating Revenue mirrored the Total Revenue, indicating the majority of revenue comes from core business operations.
- Gross Profit margin has remained relatively consistent, with values of $3.07 billion in Q1 2023 and rising to $3.15 billion by Q4 2023.
2. Cost Management
Analyzing Cost of Revenue, Operating Expenses, and Total Expenses provides insight into the company’s cost management:
- Cost of Revenue has gradually increased from $65.84 billion in Q1 2023 to $77.75 billion in Q4 2023.
- Operating Expense shows a decrease from $1.96 billion in Q1 2023 to $2.51 billion in Q4 2023, representing operational efficiency initiatives.
- Total Expenses tracked upward from $67.81 billion in Q1 2023 to $80.25 billion by Q4 2023.
3. Profitability Analysis
Examining EBITDA, Operating Income, Pretax Income, and Net Income:
- EBITDA also shows improvement from $1.17 billion in Q1 2023 to $0.84 billion in Q4 2023 despite reductions in the latest quarter.
- Operating Income enhanced significantly from $1.1 billion in Q1 2023 to $0.65 billion in Q4 2023.
- Pretax Income rose from $0.93 billion in Q1 2023 to $0.61 billion in Q4 2023.
- Net Income started at $0.79 billion in Q1 2023 and decreased slightly to $0.59 billion by Q4 2023.
4. Cash Flow Indicators
Reconciled Depreciation and Interest Expense provide insights into cash flow:
- Reconciled Depreciation remained relatively consistent, oscillating around $159 million to $161 million over the periods.
- Interest Expense increased from $79 million in Q1 2023 to $64 million in Q4 2023.
5. Taxation
Observing the Tax Rate, Tax Provision, and Tax Effect of Unusual Items:
- Tax rates varied, with a noticeable increase in Q1 2023 at 0.113 to a decrease in Q4 2023 at 0.21.
- Tax Provision amplified from $106 million in Q1 2023 to a negative $18 million in Q4 2023 (credit).
- The Tax Effect of Unusual Items has been negative, which indicates non-recurring or extraordinary expense recognition.
6. Shareholder Metrics
Evaluating Diluted and Basic EPS, Average Shares, and Net Income Available to Common Stockholders:
- Diluted EPS started at 5.71 in Q1 2023 and ended at 4.42 in Q4 2023.
- Basic EPS showed a similar trend, from 5.75 in Q1 2023 to 4.45 in Q4 2023.
- Average Shares issued have slightly increased over the periods, contributing to EPS dilution.
- Net Income Available to Common Stockholders stayed consistent with net income values across the quarters.
7. Conclusion
MCK displays robust revenue growth but faces margin pressures and escalating costs, impacting profitability. Continuous improvement in operating efficiencies and reviewing cost structures could enhance profitability. A vigilant approach to managing interest expenses and deploying internal cash efficiently could further benefit shareholder returns.
8. Appendices
Table 1: All financial data used from 2023-03-31 to 2023-12-31 is provided through the analysis text.