UPDATE 1-CVS expects earnings to rise in 2014, lifts dividend
Dec 18 (Reuters) - CVS Caremark Corp said on Wednesday that it expected sales and earnings to rise in 2014 even though it anticipated only a "modest" benefit next year from the launch of the U.S. Affordable Care Act, popularly known as Obamacare.
The company said in presentation slides released ahead of its analysts day in New York that it expected revenue to rise between 4 percent and 5.25 percent next year, with big gains in its pharmacy benefits management business mitigating softer growth at its drugstores.
CVS expects same-store sales to be up 0.75 percent to 2 percent in 2014.
The company, which operates the No. 2 U.S. drugstore chain after Walgreen Co, expects adjusted earnings to rise to a range of $4.36 to $4.50 per share in 2014, while analysts on average were projecting a profit of $4.47, according to Thomson Reuters I/B/E/S.
The company said a marketing ban imposed earlier in the year by the Centers for Medicare and Medicaid Services to enroll patients in one of its Medicare prescription drug plans was "a lost opportunity."
The CMS ban on some Medicare Part D plan activity arose in January after CVS converted to a new enrollment system, which led to service problems, such as an increase in calls and problems in processing claims. In some instances, patient claims could not be processed at pharmacies.
The company said its board had approved a 22 percent increase in the quarterly dividend, bringing it up to 27.5 cents per share. The board also approved a new $6 billion share buyback program.
CVS said it expected its adjusted earnings per share from continuing operation for 2013 to come in at the high end of the $3.94-to-$3.97 range it gave last month.