CVS Profit Grows, But Forecast Soft--Update
February 09 2016 - 8:38AM
Dow Jones News
By Chelsey Dulaney
CVS Health Corp. reported higher profit and revenue in its
fourth quarter driven by growth in its pharmacy businesses, but the
company gave a soft earnings forecast for its current quarter.
CVS said it expects earnings of $1.14 a share to $1.17 a share,
excluding special items. Analysts had been expecting adjusted
earnings of $1.34 a share, according to Thomson Reuters.
Shares fell 3% to $87 a share in premarket trading.
CVS's reimbursement rates have been under pressure as more drugs
are dispensed through federal Medicare and Medicaid programs, which
carry lower margins than private insurers. CVS has turned to
acquisitions to help add scale. In December, the company completed
its acquisition of Target Corp.'s 1,600-plus pharmacies.
For the period ended Dec. 31, CVS reported a profit of $1.5
billion, or $1.34 a share, up from $1.32 billion, or $1.14 a share,
a year earlier. Excluding special items, per-share earnings rose to
$1.53 a share, matching the average forecast of analysts polled by
Thomson Reuters.
Quarterly revenue rose 11% to $41.15 billion, after eliminating
inter-segment sales. Analysts were forecasting revenue of $41.13
billion in revenue.
Sales in its retail business increased 12.5% to $19.9 billion,
with about half of that growth owing to its recent acquisition of
Omnicare Inc. Sales at stores, excluding newly opened or closed
locations, rose 3.5%, though front-of-store sales edged down 0.5%
amid softer traffic.
The front end, where CVS sells over-the-counter drugs, snacks,
beauty products and other sundries, has been hurt by its decision
to stop selling tobacco products.
But its retail pharmacy sales remained strong. Both pharmacy
sales and prescription volumes, on a same-store basis, rose 5%.
Its Caremark and other pharmacy-services businesses posted a
11.1% increase in sales to $26.5 billion, driven by growth in
selling specialty drugs and a 7.2% increase in processed
claims.
CVS backed its earnings forecasts for the full year.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
(END) Dow Jones Newswires
February 09, 2016 08:23 ET (13:23 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
CVS Health (NYSE:CVS)
Historical Stock Chart
From Apr 2024 to May 2024
CVS Health (NYSE:CVS)
Historical Stock Chart
From May 2023 to May 2024