Pharmacy healthcare provider CVS Caremark Corp. (CVS) Monday reported higher fourth-quarter profit, compared to last year, as revenue and operating profit increased in both its divisions. Adjusted earnings topped Wall Street view.
The Woonsocket, Rhode Island-based company's fourth-quarter net income available to common shareholders increased to $1.049 billion or $0.74 per share from $949 million or $0.65 per share reported last year.
Income from continuing operations for the fourth quarter increased to $1.051 billion or $0.74 per share from last year's $954 million or $0.65 per share.
Adjusted earnings per share from continuing operations, which excludes $108 million of intangible asset amortization related to acquisition activity, were $0.79, compared to $0.70 in the fourth quarter of 2008. On average, 19 analysts polled by Thomson Reuters expected the company to earn $0.78 per share for the quarter. Analysts' estimates typically exclude special items.
For the third quarter, the company's net income available to common shareholders was $1.02 billion or $0.71 per share.
Net revenues for the fourth quarter increased to $25.822 billion from $24.142 billion in the fourth quarter of 2008. Analysts had estimated revenues for the quarter to be $26.22 billion. Net revenues for the third quarter were $24.64 billion.
Fourth-quarter operating profit increased to $1.895 billion from $1.732 billion reported last year.
Quarterly revenues in the pharmacy services segment increased 14.5% to $13.492 billion. Adjusting the growth rate for the impact of new generics, net revenues would have grown 18.3% in the pharmacy services segment, the company added. Segment operating profit grew to $833 million from $809 million reported last year.
Pharmacy network claims processed during the just concluded quarter decreased 5.6% to 151.4 million, primarily due to the termination of two large health plan clients effective January 1, 2009 and three fewer reporting days in the period. Mail choice claims processed during the quarter increased 4.4% to 16.7 million from last year, mainly due to net new client starts.
The pharmacy benefits business has been under scanner since last year, when CVS said it lost $4.8 billion in contracts for 2010.
Revenues in the retail pharmacy segment increased 4.5% to $14.455 billion in the fourth quarter of 2009 and operating profit increased to $1.220 billion from $1.051 billion in the prior year. Same store sales rose 4.9% in the quarter. According to CVS, the growth rate of revenues in the retail pharmacy segment is lower than that of same store sales due to three fewer reporting days in the quarter.
Pharmacy same store sales rose 7.3% in the fourth quarter, and reflected the negative impact of about 290 basis points from recent generic introductions, and the positive impact of nearly 270 basis points from Maintenance Choice program. Front store same store sales increased 0.3% in the fourth quarter of 2009.
During the quarter, the generic dispensing rate in the pharmacy services segment increased about 220 basis points to 68.9% and rose nearly 260 basis points to 70.6% in the retail segment.
During the fourth quarter of 2009, CVS opened 23 new retail pharmacy stores, and closed 6 retail pharmacy stores and 2 specialty pharmacy stores. As of December 31, 2009, the company operated 7,025 retail pharmacy stores, 49 specialty pharmacy stores, 18 specialty mail order pharmacies and 6 mail order pharmacies.
Tom Ryan, chairman, president, and chief executive officer, said, "We made good progress in 2009 in solidifying our position as the largest pharmacy health care provider in the nation with the broadest capabilities...I'm very pleased to report continued industry-leading performance in our retail pharmacy business and solid performance in our PBM, which resulted in double-digit EPS growth and significant free cash flow generation."
For fiscal year 2009, net income available to common shareholders increased to $3.696 billion or $2.55 per share from $3.198 billion or $2.18 per share in the prior year. Total revenue increased to $98.729 billion from $87.472 billion in fiscal year 2008. For the full year, analysts looked for earnings of $2.63 per share on revenues of $99.14 billion.
Among peers, Walgreen Co. (WAG) is expected to announce second-quarter results on March 23. Analysts look for earnings of $0.72 per share on revenues of $17.41 billion
CVS closed Friday's regular trade at $31.07, down $0.08 or 0.26%, on 25.37 million shares. In the extended session, the stock added $1.17 or 3.77% and was trading at $32.24. For the past year, the shares traded in the range of $23.74-$38.27.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.