CVS Health Corp, the No. 2 U.S. drugstore operator, reported a better-than-expected quarterly net revenue, helped by a jump in pharmacy same-store sales and strength in its specialty pharmacy business.
Continue Reading Below
The company's shares rose 2.8 percent to $102.30 in premarket trading.
Revenues in the pharmacy services division jumped 21.7 percent to $23.9 billion, driven by growth in specialty pharmacy business, the company said.
CVS Health has focused on developing its specialty pharmacy business, which sells drugs to treat complex diseases such as multiple sclerosis, rheumatoid arthritis, hepatitis C and cancer.
Pharmacy same-store sales rose 5.5 percent in the fourth quarter ended Dec. 31.
Comparable sales in the company's front-store business fell 7.2 percent, largely due to the absence of tobacco products in its stores.
CVS became the first national drugstore chain in the United States to take cigarettes off its shelves from Oct. 1.
The company had warned that the decision would hurt profits initially, along with a $2 billion hit to annual sales.
CVS on Tuesday reaffirmed its current-quarter earnings forecast of $1.06-$1.09 per share. Analysts on average are expecting a profit of $1.08 per share, according to Thomson Reuters I/B/E/S.
Net revenue rose nearly 13 percent to $37.06 billion.
The company, which also operates a major pharmacy benefits management business, said net income rose to $1.32 billion, or $1.14 per share, from $1.27 billion, or $1.05 per share.
Excluding items, CVS earned $1.21 per share, at the top end of the $1.18-$1.21 per share it forecast in November.
Analysts on average had expected a profit of $1.20 per share on revenue of $36.08 billion. (Reporting by Shailaja Sharma in Bengaluru; Editing by Savio D'Souza and Sriraj Kalluvila)