CVS Beats Estimates, Raises EPS Guidance

Before you go, we thought you'd like these...
Before you go close icon

CVS Caremark Corp. (NYSE: CVS) reported third-quarter 2012 earnings this morning. The pharmacy benefits management and retail sales firm posted adjusted diluted earnings per share (EPS) of $0.85 on revenues of $30.2 billion. In the same period a year ago, the company reported EPS of $0.70 on revenues of $26.7 billion. Third-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.84 and $30.09 billion in revenues.

The company's CEO said:

The retail pharmacy business continued to capitalize on the market disruption resulting from the impasse between two of our competitors, and our retention of the prescriptions we gained during that impasse has been strong since their dispute was resolved in mid-September. Given what we have seen to date, we are optimistic that we will exceed our initial retention goal for the fourth quarter and now expect to retain at least 60% of the prescriptions gained during the impasse.

CVS was able to take advantage of the contract dispute between Walgreen Co. (NYSE: WAG) and Express Scripts Inc. (NASDAQ: ESRX) to attract new business and the company appears confident in its ability to retain these new subscribers.

The company also raised its full-year EPS guidance from a range of $3.32 to $3.38 to a range of $3.38 to $3.41. The company based the revision on an accelerated share repurchase program of $1.2 billion that it put into place in September.

The one sore spot in this quarterly report has to be the 9% drop in same-store pharmacy sales, which CVS attributed to the recent introduction of generic drugs. That is worrisome because the retail pharmacy segment generates about 80% of the company's gross profit.

The company's shares are up about 2% in premarket trading this morning, at $47.60, in a 52-week range of $36.44 to $49.23. The consensus target price for the shares was around $53.00 before today's report.

Paul Ausick

Filed under: 24/7 Wall St. Wire, Earnings, Services Tagged: CVX, ESRX, WAG
Read Full Story


S&P 500 2,358.57 16.98 0.73%
DJIA 20,701.50 150.52 0.73%
NASDAQ 5,875.14 34.77 0.60%
DAX 12,189.10 39.68 0.33%
NIKKEI 225 19,217.48 14.61 0.08%
HANG SENG 24,392.05 46.18 0.19%
USD (per EUR) 1.08 0.00 -0.24%
USD (per CHF) 0.99 0.00 0.17%
JPY (per USD) 110.92 -0.31 -0.28%
GBP (per USD) 1.25 0.00 0.26%

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners