Medco Health Solutions Earnings: The Streak is Broken

Medco Health Solutions (NYSE: MHS) announced its results for the second quarter on July 21, 2011. Let's take a closer look at the numbers and see what steps you can take.

Earnings and Revenue:
The company reported EPS of adjusted net income of 96 cents/share versus the 94 cents/share estimate and revenues of $17.07 billion versus the $17.08 billion estimate. Medco Health Solutions' EPS outpaced analyst estimates while the company's revenues came in below predictions. EPS rose 10.4% while revenue climbed 4.1% from the same period last year.

With last quarter's falling profit, the company ends a streak of four consecutive quarters of year-over-year profit increases. Year over year revenue increases in the past five quarters have averaged 7.9%, fourth quarter of the last fiscal year saw the biggest increase, when revenue rose 11.1% from the year earlier quarter. The company's revenue has increased the past four quarters on a year-over-year basis.

Income:
For the year, Medco Health Solutions reported net income of $3.47 per share. The company fells short of analysts projections of $3.55. According to the reported number, the company's income fell 4% from last year's levels.

Official Comment:
"Medco's second-quarter results are characterized by strong performance across the enterprise. We generated record revenues that include a 43.3 percent increase in service revenues driven primarily by UnitedBioSource Corp (UBC) and growth across our portfolio of service offerings. Record specialty operating income, continued strong performance in Medicare, and record generic mail-order volume and generic dispensing rates also contributed to our earnings per share growth this quarter. Importantly, our margin percentage profile is stable and expected to grow in the future," said David B. Snow Jr., chairman and chief executive officer of Medco.

Industry:
With price/earnings growth of 1.1%, Medco Health Solutions' industry, medical-HMO, is expanding. The company's EPS compares unfavorably with its industry's estimated average of $3.26.

What to Do Next:
Those are the latest numbers from Medco Health Solutions, including how the announcement compared to Wall Street estimates. Benzinga consistently provides earnings previews and recaps for major corporate events. Be sure to visit us next quarter for a full Medco Health Solutions preview.

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