WOONSOCKET, R.I. – CVS Caremark Corp. expects its full-year profit to be slightly better than expected as it wins over former patrons of Walgreen Co. who fill prescriptions with pharmacy benefits manager Express Scripts Inc.
CVS, which operates the CVS drugstore chain and the CVS Caremark pharmacy benefits management business, also posted a fourth-quarter profit in line with analysts’ expectations, helped by better-than-expected revenue.
CVS is among the retailers benefitting as patients who still fill their prescriptions in the Express Scripts network go elsewhere after Walgreen stopped filling such prescriptions at the beginning of the year.
Pharmacy benefit managers, or PBMs, such as Express Scripts and CVS Caremark administer drug benefits for employers and health plans and they also run mail-order pharmacies. CVS can add the ability to pick up prescriptions at its namesake drugstores.
CVS expects to post 2012 adjusted earnings of $3.18 to $3.28 per share, raising the low and high end of its December forecast by 3 cents.
The higher forecast only reflects the expected benefit the company foresees in the current first quarter. In December, CVS CFO Dave Denton said the rift could add 8 cents to 11 cents per share to the company’s 2012 profit.
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.