Monday, August 31st16.8°C
27214
24949

CVS Caremark's 2nd quarter profit increases 11 per cent, drugstore chain raises forecast

CVS Caremark's second-quarter earnings jumped 11 per cent to top expectations, as specialty drug use helped fuel growth for the drugstore chain and pharmacy benefits manager.

The Woonsocket, Rhode Island, company also said Tuesday that it was raising its earnings forecast for 2014.

CVS Caremark Corp. runs the nation's second-largest drugstore chain with more than 7,700 locations and one of the largest pharmacy benefits management, or PBM, businesses. Revenue from its PBM side jumped 16 per cent, and operating profit from that segment soared 30 per cent, helped by new business and specialty drug growth.

Specialty drugs are very expensive, usually injected, drugs for complex chronic health conditions — a category that is driving overall spending on medications. CVS Caremark has started a new program called Specialty Connect that allows customers with these prescriptions to either pick them up at pharmacies or through the mail.

CVS Caremark didn't detail the program's impact on its results, but CEO Larry Merlo said it gives the company a chance to "not just manage the specialty drug but manage the specialty patient." That can lead to better cost control and more business from those patients.

Overall, CVS Caremark earned $1.25 billion, or $1.06 per share, in the quarter that ended June 30. That's up from $1.12 billion, or 91 cents per share, in the same quarter a year ago.

Earnings, adjusted for amortization costs, came to $1.13 per share. The average estimate of analysts surveyed by Zacks Investment Research was for earnings of $1.10 per share.

The company said revenue climbed 11 per cent to $34.6 billion from $31.25 billion in the same quarter a year ago. That also beat the average analyst expectation of $33.42 billion.

CVS Caremark said revenue from its established drugstores climbed 3.3 per cent in the quarter despite a consumer that executives described as "a cautious purchaser of products" and a hit from its decision earlier this year to phase out tobacco sales from its stores by this fall. The company has said it expected to take an annual revenue hit of about $2 billion from the latter move, which it is making due to its increased focus on health care.

CVS Caremark now expects 2014 adjusted earnings to range between $4.43 and $4.51 per share, compared to its previous forecast for earnings of $4.36 to $4.50 per share.

Analysts expect $4.46 per share, on average, according to FactSet.

Shares of CVS Caremark climbed 20 cents to $77.57 in midday trading Tuesday while the Standard & Poor's 500 index slipped. The stock had climbed about 8 per cent to $77.37 since the beginning of the year, as of Monday's close.

The Canadian Press


Read more Business News

25990


Recent Trending




Today's Market
S&P TSX13859.12-5.95
S&P CDNX559.48+3.49
DJIA16528.03-114.98
Nasdaq4776.51-51.82
S&P 5001972.18-16.69
CDN Dollar0.76130.00
Gold1140.80+9.20
Oil47.69-1.51
Lumber233.00-1.20
Natural Gas2.684-0.005

 
Okanagan Companies
Pacific Safety0.185+0.020
Knighthawk0.010.00
QHR Technologies Inc1.23-0.06
Cantex0.04-0.01
Anavex Life Sciences1.35+0.01
Metalex Ventures0.05-0.00
Russel Metals22.11+0.70
Copper Mountain Mining0.63-0.01
Colorado Resources0.075-0.005
ReliaBrand Inc0.0045+0.0005
Sunrise Resources Ltd0.02-0.01
Mission Ready Services0.085+0.015
Decisive Dividend Corp2.75+0.14

 





FEATURED Property
16329543926 Hornby Terrace
4 bedrooms 4 baths
$489,900
more details
image2image2image2
Click here to feature your property
Please wait... loading


Agree to ask questions

Photo: Thinkstock.comThe STORY: I think, said Janet to herself, that I just figured out a solution to my problem of letting the prospect run the meeting.With that thought in mind, she got out of her c...


Your business is not a bank

Photo: Thinkstock.comYour plumbing business is not a bank. But when you are giving terms to customers that exceed what you get from your suppliers, you become one. And every time that someone does not...


Begin with the end in mind

Photo: ContributedWe humans love our dates: birthdays, anniversaries, 9/11, the Ides of March - our lives are intimately woven within the tapestry of the calendar. So it should come as no surprise whe...

_



27511

26509


Member of BC Press Council


26780