Helped primarily by record volumes and new clients, MedcoHealth Solutions (MHS) reported on Tuesday an 11% gain in fourth-quarter profit, though traders booed the worse-than-expected earnings.

The Franklin Lakes, NJ-based company posted net income of $378.5 million, or 88 cents, compared with $341.5 million, or 70 cents, in the same quarter last year.

Excluding special items, the company earned a record 90 cents, missing average analyst estimates polled by Thomson Reuters of 94 cents.

Revenue for the provider of clinically-driven pharmacy services was $16.9 billion, up 11.1% from $15.25 billion a year ago, beating the Street’s view of $16.65 billion.

Sales were fueled by a 58.7% increase in service revenues to a record $350 million, a 7.3% increase in mail-order prescriptions to $27.9 million, and higher generic volumes. The gains resulted from new client wins and higher prices, partially offset by higher volumes of lower-priced generic drugs.

“Our success this year can be measured in many ways - by the savings we delivered to our clients from closing 2.3 million gaps in care and improving health outcomes, by the nearly $3.7 billion in generic savings delivered to our clients and members, and by Medco's continued strong sales and client retention rates, endorsing the overall value of the services we deliver,” Medco CEO David Snow said in a statement.

The company reaffirmed its 2011 earnings guidance of $3.53 to $3.66 a share, representing growth of 12% to 16% year-over-year. Non-GAAP earnings are expected to be in the range of $3.99 to $4.12 a share.

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