CVS Caremark 4th-Quarter Profit Rose 2.6% Amid Continued Sales Growth
02/06/2013| 07:52am US/Eastern
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By Tess Stynes
CVS Caremark Corp.'s (>> CVS Caremark Corporation) fourth-quarter earnings rose 2.6% as the company reported revenue growth in its pharmacy-services and retail drugstore operations.
For the year, the company raised its forecast for per-share adjusted earnings from continuing operations by two cents and now expects $3.86 to $4.
CVS's retail pharmacy business gained customers last year in the wake of a contract dispute between rival Walgreen Co.'s (>> Walgreen Company) and pharmacy-benefits manager Express Scripts Holding Co. (>> Express Scripts Holding Co) that has since been resolved.
A wave of major generic drugs introductions is having a mixed effect on the industry. Though the copycat drugs carry higher margins than branded products, they command lower prices, hurting sales revenue.
CVS Caremark reported a profit of $1.13 billion, or 90 cents a share, up from $1.1 billion, or 81 cents a share, a year earlier. Excluding debt-extinguishment losses, acquisition-related charges and other items, adjusted earnings from continuing operations were $1.14. Revenue increased 11% to $31.39 billion.
Analysts polled by Thomson Reuters most recently projected earnings of $1.10 on revenue of $31.13 billion.
Revenue in the larger pharmacy-services business climbed 17% to $18.6 billion, reflecting new client starts, higher prices and growth of its Medicare Part D program. Pharmacy network claims processed rose 6.5%.
On the retail side, revenue increased 5.1% to $16.3 billion. Same-store sales were up 4% from a year earlier, as pharmacy same-store sales also improved by 4%. Same-store sales in the front end of the store grew 3.9%.
Shares closed Tuesday at $51.72 and were inactive premarket.
Write to Tess Stynes at tess.stynes@dowjones.com
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