Drugstore chain CVS Health Corp. (CVS), which changed its name from CVS Caremark Corp. in September, reported Friday a profit for the first quarter that increased eight percent from last year, reflecting double-digit revenue growth. Same store sales for the retail pharmacy rose 1.2 percent over last year.
Both adjusted earnings per share from continuing operations and quarterly revenues topped analysts' expectations. The company also raised its adjusted earnings guidance for the full-year 2015.
"We delivered better-than-expected results this quarter, primarily driven by stronger-than-expected prescription volumes as well as favorable purchasing and rebate economics in the PBM," President and CEO Larry Merlo said in a statement.
The Woonsocket, Rhode Island-based company reported net earnings of $1.22 billion or $1.07 per share for the first quarter, higher than $1.13 billion or $0.95 per share in the prior-year quarter.
Excluding items, adjusted net earnings for the quarter was $1.29 billion or $1.14 per share, compared to $1.21 billion or $1.02 per share in the year-ago quarter.
On average, 21 analysts polled by Thomson Reuters expected the company to report earnings of $1.08 per share for the quarter. Analysts' estimates typically exclude special items.
Net revenues for the quarter increased 11.1 percent to $36.33 billion from $32.69 billion in the same quarter last year, and topped nineteen Wall Street analysts' consensus estimate of $35.93 billion.
Revenues for the retail pharmacy increased 2.9 percent to $16.95 billion from the year-ago quarter, and same store sales rose 1.2 percent over last year. Pharmacy same store sales rose 4.2 percent, while front store same-store sales was down 6.1 percent. Retail pharmacy same store prescription volumes increased 5.1 percent on a 90-day equivalent basis.
Pharmacy services revenues grew 18.2 percent to $23.88 billion from the prior-year quarter, reflecting growth in specialty pharmacy and pharmacy network claims.
Pharmacy network claims processed during the quarter increased 11.0 percent to 230.8 million from a year ago, primarily due to net new business as well as growth in Managed Medicaid and public exchanges.
Generic dispensing rate increased about 150 basis points to 83.5 percent in pharmacy services, and also improved about 150 basis points to 84.4 percent in retail pharmacy.
During the first quarter, CVS opened 38 new retail drugstores and closed ten retail drugstores. In addition, the company also relocated 12 retail drugstores.
"We are already off to a solid start in the 2016 PBM selling season. Our integrated model allows us to provide differentiated products and services that generate savings for our clients while providing better health outcomes and convenience for patients. We remain very well positioned with our distinctive, channel-agnostic solutions, which are resonating strongly in the marketplace," Merlo added.
Looking ahead to the second quarter, the company projects earnings from continuing operations in a range of $1.10 to $1.13 per share and adjusted earnings in the range of $1.17 to $1.20 per share. Analysts expect the company to report earnings of $1.25 per share for the quarter.
For fiscal 2015, the company raised adjusted earnings from continuing operations forecast to a range of $5.08 to $5.19 per share from the prior forecast range of $5.05 to $5.19 per share. Street is currently looking for full-year 2015 earnings of $5.16 per share.
In Friday's regular trading session, CVS is currently trading at $99.51, up $0.22 or 0.22% on a volume of 0.58 million shares. In the past 52-week period, the stock has been trading in a range of $72.43 to $105.46.
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