Express Scripts shares jump on 3Q profit, outlook

NEW YORK - Shares of pharmacy-benefits manager Express Scripts Inc. jumped Friday after the company said its third-quarter profit surged, prompting a boost to its 2008 profit expectations and beyond.

The stock rose $4.54, or 7.9 percent, to $62.24 in afternoon trading. Shares have traded between $48.37 and $79.10 over the last 52 weeks.

Late Thursday, the St. Louis-based company said third-quarter profit rose 41 percent on increased use of generic drugs, topping Wall Street forecasts. The generic drug usage rate rose to 66.2 percent from 62.2 percent.

Meanwhile, the company boosted its 2008 profit outlook to between $3.07 and $3.10 per share, compared with a previous outlook for profit of $3.03 to $3.10 per share. Analysts polled by Thomson Reuters expect a profit of $3.07 per share, on average. Looking further ahead, the company expects 2009 profit between $3.63 to $3.73 per share, while analysts project profit of $3.63 per share.

"Despite an increasingly challenging economy and rising unemployment, Express Scripts delivered another positive earnings surprise," said Leerink Swann & Co. analyst Bret Jones, in a note to investors.

He reaffirmed a "Outperform" rating, saying company's success in driving generic use continues to drive margin expansion.

Cowen and Co. analyst Kemp Dolliver also reaffirmed a "Outperform" rating.

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