WOONSOCKET (dpa-AFX) - Pharmacy health care provider CVS Caremark Corp. (CVS) on Wednesday reported a 3 percent increase in profit for the fourth quarter, reflecting strong revenue growth at the company's pharmacy services segment.
Looking ahead, the company raised its earnings outlook for fiscal year 2012, citing a potential gain from a contract dispute between its peer Walgreen Co. (WAG) and Express Scripts Inc. (ESRX).
Net income attributable to CVS Caremark increased to $1.06 billion or $0.81 per share from $1.03 billion or $0.75 per share in the year-ago period.
Adjusted earnings per share from continuing operations rose to $0.89 from $0.79 in the prior-year quarter. On average, 21 analysts polled by Thomson Reuters expected earnings of $0.89 per share. Analysts' estimates usually exclude special items.
Net revenues for the quarter grew 15.2 percent to $28.32 billion from $24.59 billion in the year-ago period. Analysts had a consensus estimate of $28.12 billion.
Pharmacy Services segment revenues grew 32.4 percent from the year-ago period to $15.87 billion, mainly reflecting the addition of a long-term contract with Aetna, Inc. (AET) as well as new activity resulting from the acquisition of the Medicare prescription drug business of Universal American Corp. (UAM) in the second quarter.
Retail Pharmacy segment revenues increased 4 percent to $15.49 billion, with same stores sales up 2.5 percent. Pharmacy same store sales rose 3.6 percent and front store same store sales increased 0.1 percent from last year.
For fiscal year 2011, CVS Caremark's net income edged up to $3.49 billion or $2.57 per share from $3.43 billion or $2.49 per share last year.
Adjusted earnings per share from continuing operations rose to $2.80 from $2.68 in the prior year. Analysts expected earnings of $2.80 per share.
Net revenues for the year grew 11.8 percent to $107.10 billion from $95.78 billion last year, with Pharmacy Services sales up 24.9 percent and Retail Pharmacy revenues up 3.9 percent. Analysts had a consensus estimate of $107.26 billion.
Looking ahead, CVS Caremark raised its earnings guidance for fiscal year 2012 to reflect the anticipated benefit to first-quarter results of about $0.03 per share from the impasse between Walgreen and Express Scripts.
The company noted that the guidance adjustment only reflects the potential estimated benefit if the stalemate continues through the end of the first quarter, and does not contemplate any potential benefit beyond the first quarter.
For the first quarter, CVS Caremark forecast adjusted earnings per share from continuing operations of $0.61 to $0.63.
For fiscal year 2012, CVS Caremark now forecasts adjusted earnings per share from continuing operations in a range of $3.18 to $3.28, up from the prior range of $3.15 to $3.25.
Analysts expect earnings of $0.61 per share for the first quarter and $3.24 per share for the full year.
CVS closed Tuesday's trading at $43.08, down $0.19 on 9.55 million shares. In Wednesday's pre-market, the stock is adding $0.90 or 2.09 percent to 43.98.
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