CVS Earnings Climb 8.8% as Customers Switch Pharmacies

CVS Caremark

earnings rose 8.8% as increasing numbers of customers brought more revenue. The company earned $776 million, or 59 cents per share, in the first quarter of 2012 compared to $713 million, or 52 cents per share a year earlier. Pharmacy services revenue increased 32.3% to $18.3 billion following the acquisition of the Medicare prescription drug plan of Universal American Corp. nearly one year ago. Revenue was also fueled by higher drug costs. This is the second consecutive quarter of increased sales. CVS earned about $1.1 billion in the fourth quarter of 2011 and pharmacy sales rose more than 30% from a year earlier. Pharmacy claims processed increased about one quarter from 157.7 million to 198.5 million. “Results in both our retail and PBM segments came in at the high end of our guidance, while EPS exceeded expectations,” President and Chief Executive Officer Larry Merlo said in a statement released today. "Our retail team has done an outstanding job capitalizing on the unprecedented opportunity for share gains afforded to us by the impasse between two of our industry peers." Walgreen

ended its association with Express Scripts

, creating opportunities for other pharmacies and pushing its earnings down 7.7% for the second quarter of 2012, the company said in a March statement. The Deerfield, Ill.-based company earned $683 million, 79 cents per share, compared to $739 million, 80 cents per share, in 2011. CVS expects to earn 3 to 4 cents per share in the second quarter as a result of the split between Walgreens and Express Scripts. CVS rose its full-year estimates to an earnings per share of $3.23 to $3.33. Analysts expect the company will earn $3.29 per share. CVS also revised anticipated operating profit from the retail pharmacy program to an increase of 10.5% to 12.5% from a range of 8.5% to 10.5%. Competitor Rite Aid Corporation

reported losses of $163.8 million, or 18 cents per share, in the fourth quarter of fiscal year 2012 to compared to a year earlier loss of $205.7 million, or 24 cents per share, the company said in a statement April 12. Revenue at the Camp Hill, Penn.-based company rose to $7.15 billion from $6.46 billion.