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Second quarter profits of biggest drug store chain rose by 15 percent, which beat expectations.
CVS Caremark plans to hire 150 additional employees in September at its mail-order fulfillment center in the Hanover Crossings commercial park.
AIMEE DILGER/THE TIMES LEADER
NEW YORK — CVS Caremark, one of the nation’s biggest drugstore operators, said Tuesday its second-quarter profit rose 15 percent, helped by strong pharmacy benefits revenue and a retail sales boost due to a later Easter.
The results beat Wall Street expectations and the company boosted its outlook for the full year. It gave no formal outlook for 2010 but its chairman and CEO, Tom Ryan, said he would be “very disappointed if we didn’t have an EPS growth of at least 13 to 15 percent next year.”
The Woonsocket, R.I., company said it earned $886.5 million, or 60 cents per share, in the three months ended June 30, up from $771.2 million, or 53 cents per share, a year ago.
Meanwhile, revenue rose 18 percent to $24.87 billion from $21.14 billion a year ago and just above Wall Street estimates of $24.41 billion.
Pharmacy services revenue rose 22 percent to $13 billion, partly because of the addition of RxAmerica pharmacy benefits management business, which the company acquired as part of the Longs buyout in October.
Ryan said Caremark beneficiaries are finding it more convenient to fill their prescriptions at CVS, where they can save money. He added that CVS customers spent more money per trip, and the stores took market share from national and regional rivals. Acquisitions like Longs Drugs Stores and RxAmerica are doing better than the company expected, he said.
The Caremark pharmacy benefits business continued to gain a boost from its Maintenance Choice program, which allows health plan members to pick up 90-day orders at drugstores while paying lower mail-order prices. The company has 270 Maintenance Choice clients, up from 200 after the first quarter.
Pharmacy benefit network revenue rose 27.4 percent while mail-order services revenue rose 12.5 percent.
In September CVS said it would hire 150 additional employees at its mail order fulfillment center in the Hanover Crossings commercial park, raising total employment there to 600.
In a note to clients, Lazard Capital Markets analyst Tom Gallucci said Caremark’s business appears to be moving in the right direction, as the company filled more prescriptions than he expected. The retail pharmacy unit got a lift from a later Easter during the quarter and an excise tax on cigarette sales.