CVS/Caremark Profit Up 24%, Outpacing Estimates

Drugstore chain CVS/Caremark said Tuesday first-quarter earnings rose 24.1% on strong sales at its pharmacy and front-end retail business.


In the first reporting period after the merger of the two rivals, CVS/Caremark said it earned $408.9 million, or 43 cents a share, up from $329.6 million, or 39 cents a share, in the same quarter a year ago. The results include 10 days of operations from Caremark after the deal closed on March 22.

Excluding one-time items related to the deal, the company earned 46 cents a share.

Revenue rose 32% from the year-ago period to $13.18 billion from $9.98 billion a year ago.

Sales at stores open at least a year rose 7.5%, while pharmacy same-store sales climbed 7.8% and front-end same-store sales jumped 6.6%.

Analysts surveyed by Thomson Financial predicted a profit of 45 cents a share, with sales of $13.77 billion.

Looking ahead, Chief Financial Officer David Rickard said CVS expects second-quarter earnings of 44 cents to 47 cents a share and full-year earnings of $1.86 to $1.91 a share, that’s slightly ahead of expectations from analysts surveyed by Thomson Financial.

Rickard said the forecast assumes CVS will buy back its shares, but he did not specify the size of the expected share repurchase.