Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  Equities  >  Nyse  >  CVS Health Corp    CVS

SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector newsTweets 

CVS Caremark 1Q Profit Rises 8.8%; Raises Fiscal Year View

share with twitter share with LinkedIn share with facebook
share via e-mail
0
05/02/2012 | 05:48pm CEST

--An extra day for leap year and the early onset of the allergy season helped lift retail sales

--Valentine's Day season sales jumped 9%, a positive shift after a weaker-than-expected holiday hurt the fourth quarter

--CVS has picked up business driven away from Walgreen after it left the Express Scripts network at the beginning of 2012

(Updates with details from the CVS conference call and the latest stock quote.)

 
   By John Kell 
   Of  
 

CVS Caremark Corp.'s (>> CVS Caremark Corporation) first-quarter profit rose 8.8% as its pharmacy-benefits-management business again performed well and an extra day for leap year and the early onset of the allergy season helped lift front-end sales.

The drugstore-chain raised its full-year adjusted-earnings guidance for the second time this year on a greater-than-expected benefit from business being driven away from rival Walgreen Co. (WAG), which left pharmacy-benefits manager Express Scripts Holding Co.'s (ESRX) network at the beginning of the year due to a contract rate dispute.

Better-than-expected first-quarter results also factored into the higher target, with CVS now seeing earnings between $3.23 to $3.33 a share, up from the $3.18 to $3.28 a share previously expected. The company's second-quarter profit outlook also topped Wall Street's expectations.

Shares were up 2% at $45.62 in recent trading, while Walgreen declined 1.2% to $34.31.

CVS has picked up business driven away from Walgreen as the dispute with Express Scripts forced some customers to transfer their prescriptions. CVS has launched marketing and in-store investments to court influx customers and is hopeful it can retain the new business even if Walgreen were to secure a new contract with Express Scripts.

In an interview with Dow Jones Newswires, CVS Chief Executive Larry Merlo said the company has seen an influx of customers and his team has done a good job of introducing the firm's brands to new clients. He said the response has been "very favorable." CVS on Wednesday said the full-year guidance reflects the potential estimated benefit if the stalemate continues only through the end of the second quarter.

In the latest quarter, the company said revenue in its pharmacy-services business surged 32% to $18.3 billion, again boosted by its acquisition of a Medicare prescription drug business. Merlo told analysts the unit benefited from new payers including the California Public Employees' Retirement System and International Business Machines Corp. (>> International Business Machines Corp.), as well as product launches.

On the retail side of the pharmacy business, revenue rose 9.9% to $16 billion. Same-store sales increased 8.4% over the prior-year period, with pharmacy same-store sales rising 9.8% as CVS outperformed all main competitors even more so than in prior quarters, according to Merlo. The overall 8.4% jump was the largest increase CVS has reported since late 2006, before it acquired Caremark.

The increase contrasts with Walgreen, which has reported slumping same-store sales since the beginning of the year. April data from Walgreen and smaller peer Rite Aid Corp. (>> Rite Aid Corporation) are due Thursday.

CVS said an extra day for leap year and an additional week day due to a calendar shift bolstered the retail business. Prescription volumes were higher, though CVS said pharmacy same-store sales were hurt by recent generic drug introductions, a trend that hurts that metric as they carry lower prices than branded products.

A weak flu season hurt the pharmacy business, though it was partially offset by the early onset of the allergy season. Merlo said those trends were reversed a year ago, when the U.S. had a severe winter and strong flu season but a late allergy season.

Merlo told Dow Jones front-end sales were also bolstered by a 9% jump during the Valentine's Day season, a positive shift after weaker-than-expected holiday revenue hurt fourth-quarter results. He added MinuteClinic retail health-care centers notched 22% top-line growth, a performance Merlo said continues to validate that business.

During the CVS conference call, Merlo said front-end sales also benefited from new Express Scripts customers, though the gain wasn't material in the first quarter.

"As we said previously, initial focus was on making the prescription transfer process as seamless as possible," said Merlo. "We began to shift gears during the quarter to focus on converting these new customers to front store customers."

For the first quarter, the company posted a profit of $776 million, or 59 cents a share, compared with a year-earlier profit of $713 million, or 52 cents a share.

Earnings from continuing operations, which excludes acquisition-related items, rose to 65 cents a share from 57 cents a year ago. CVS had predicted 61 cents to 63 cents a share.

Revenue jumped 20% to $30.8 billion, a record sum according to the company. Analysts expected $30.31 billion in revenue.

Gross margin slid to 16.6% from 18.5%, in part hurt by increased expenses associated with new PBM clients and the expansion of the Medicare Part D operation.

-By John Kell, Dow Jones Newswires; 212-416-2480; [email protected]

--Mia Lamar contributed to this article

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on CVS HEALTH CORP
04/22 Cherokee Nation sues opioid providers Cherokee Nation sues opioid wholesaler..
04/21 CVS HEALTH CORPORATION : To Hold First Quarter 2017 Conference Call
04/20 Cherokee Nation sues opioid wholesalers, retailers for abuse
04/20 CVS HEALTH : Takes Major Step to Address Chemicals of Consumer Concern
04/20 CVS PHARMACY : Unveils Enhanced Customer Experience, New Store Design
04/20 CVS HEALTH : Takes Major Step to Address Chemicals of Consumer Concern; Parabens..
04/19 CVS HEALTH : Covered Call reports for Apple, Bank of America, Cardinal Health, C..
04/19 CVS HEALTH CORP (NYSE : CVS) Partners With Phoenix VA To Improve Access To Healt..
04/18 CVS HEALTH : Some vets can go to CVS 'MinuteClinics' for minor illnesses
04/18 CVS HEALTH : Truth Initiative and CVS Health Foundation Launch Program to Make H..
More news
Sector news : Drug Retailers - NEC
04/19DJCardinal Swoops In, Strikes Deal -- WSJ
04/18DJCARDINAL HEALTH : $6.1 Billion Deal for Some Medtronic Operations Raises Debt Co..
04/18DJCARDINAL HEALTH : $6.1 Billion Deal for Some Medtronic Operations Raises Debt Co..
04/05DJWalgreens CEO Says Rite Aid Deal Closing Soon -- Update
04/05DJHot Stocks to Watch in the U.S. and Canada
More sector news : Drug Retailers - NEC
News from SeekingAlpha
04/21 Bert's Recent Buy - CVS Health Corp.
04/20 MY 75 STOCK MARCH 2017 PORTFOLIO UPD : New Dividend Record And Buying Altria And..
04/19 CVS Health Has Its Highest Dividend Yield In Years And It's A Great Buy
04/19 CVS Reinventing The Pharmacy Business And My Next 2017 Dividend Machine
04/19 A REAL DIVIDEND GROWTH MACHINE : Q1 2017 Review
Advertisement
Financials ($)
Sales 2017 184 255 M
EBIT 2017 10 131 M
Net income 2017 5 470 M
Debt 2017 24 914 M
Yield 2017 2,44%
P/E ratio 2017 15,04
P/E ratio 2018 13,35
EV / Sales 2017 0,58x
EV / Sales 2018 0,55x
Capitalization 82 118 M
More Financials
Chart CVS HEALTH CORP
Duration : Period :
CVS Health Corp Technical Analysis Chart | CVS | US1266501006 | 4-Traders
Full-screen chart
Technical analysis trends CVS HEALTH CORP
Short TermMid-TermLong Term
TrendsNeutralNeutralBearish
Technical analysis
Income Statement Evolution
More Financials
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 24
Average target price 86,3 $
Spread / Average Target 8,9%
Consensus details
EPS Revisions
More Estimates Revisions
Managers
NameTitle
Larry J. Merlo President, CEO & Non-Independent Director
David Wyatt Dorman Non-Executive Chairman
Jonathan C. Roberts Chief Operating Officer & Executive Vice President
David M. Denton Chief Financial Officer & Executive Vice President
Troyen A. Brennan Chief Medical Officer & Executive Vice President
More about the company
Sector and Competitors
1st jan.Capitalization (M$)
CVS HEALTH CORP0.66%82 118
WALGREENS BOOTS ALLIAN..1.53%90 832
EXPRESS SCRIPTS HOLDIN..-3.39%39 897
MCKESSON CORPORATION-3.23%28 822
CARDINAL HEALTH INC0.74%22 870
AMERISOURCEBERGEN CORP..3.93%17 656
More Results