CVS Caremark 4Q profit jumps more than 12 pct
CVS Caremark’s fourth-quarter earnings climbed more than 12 percent, as improved sales from established locations helped the drugstore operator and pharmacy benefits manager offset fewer customer visits.
The Rhode Island company said Tuesday that pharmacy revenue from established drugstores climbed 6.8 percent in the quarter that ended Dec. 31. That countered a drop of nearly 2 percent from the front end, or the rest of the store.
CVS Caremark runs the second-largest U.S. drugstore chain with more than 7,600 locations. It said revenue from that segment climbed more than 5 percent to $17.2 billion in the quarter.
Revenue from stores open at least a year is considered a key indicator of a drugstore chain’s financial health. It eliminates the impact of stores that have recently opened or closed.
The company draws most of its revenue from its Caremark unit, which is one of the nation’s largest pharmacy benefits managers, or PBMs. That business runs prescription drug plans for employers, insurers and other customers, and its revenue rose 5.2 percent to $19.6 billion in the quarter.
Overall, CVS Caremark earned $1.27 billion, or $1.05 per share, in the fourth quarter. That compares with earnings of $1.13 billion, or 90 cents per share, in the final quarter of 2012. Revenue rose nearly 5 percent to $32.83 billion.
Adjusted earnings totaled $1.12 per share.
The performance topped the average analyst forecast for earnings of $1.11 per share on about $32.67 billion in revenue, according to FactSet.
CVS Caremark gained national attention last week after it announced that it would phase out sales of tobacco products at its more than 7,600 stores. The company said then that the move will cost about $2 billion in annual revenue and will affect its earnings by between 6 cents and 9 cents per share.
But it also said the move won’t affect its 2014 earnings forecast for adjusted earnings of $4.36 to $4.50 per share, which the company reaffirmed Tuesday.
Analysts forecast, on average, earnings of $4.46 per share.
CVS Caremark shares rose 2.5 percent, or $1.67, to $68.61 in premarket trading more than an hour and a half before markets opened Tuesday. The company’s shares have slipped so far this year during regular trading, but the stock jumped 48 percent last year, as it set and then topped several all-time highs. The current mark of $71.99 has stood since Dec. 27.