CVS Caremark’s higher quarterly profit tops expectations

WOONSOCKET, RI. ― CVS Caremark Corp. posted a higher quarterly profit on Thursday as business improved at its pharmacy benefits management unit, and said this year’s profit should come in toward the higher end of its prior forecast.

Net income attributable to CVS Caremark rose to $868 million, or 65 cents per share, from $809 million, or 59 cents per share, a year earlier.

Adjusted earnings per share from continuing operations attributable to CVS Caremark rose to 70 cents from 64 cents, topping the company’s forecast of 66 to 68 cents and analysts’ average forecast of 68 cents, according to Thomson Reuters I/B/E/S.

Revenue rose 12.5 percent to $26.67 billion, while analysts were looking for $26.75 billion.

Revenue in the drugstore unit, which operates more than 7,300 stores and accounts for roughly half of total revenue, rose 3.8 percent to $14.7 billion. Sales at stores open at least a year, or same-store sales, rose 2.3 percent.

Revenue in the pharmacy services business jumped 25.8 percent to $14.8 billion, due largely to the addition of a previously announced major contract with Aetna Inc. and the acquisition Universal American Corp’s. Medicare prescription drug business.

CVS now expects to post adjusted earnings from continuing operations of $2.77 to $2.81 per share this year, trimming 2 cents off of the low end of the range it gave in August. Analysts’ average 2011 forecast is $2.78 per share.