CVS Caremark (NYSE:CVS) lifted its fiscal 2012 forecast and reported an 8% increase in first-quarter profit on Wednesday as it continued to nab former Walgreens (NYSE:WAG) prescription patients and build its Medicare customer base.
The Woonsocket, R.I.-based company raised its full-year guidance to a range of $3.23 to $3.33 a share, excluding items, bracketing the $3.27 forecasted by analysts on average in a Thomson Reuters poll.
For the current quarter, it sees non-GAAP earnings between 78 cents and 80 cents, above the Street’s estimate of 73 cents.
The drugstore chain and pharmacy benefits manager has benefited from a year-ago purchase of the Medicare prescription drug plan of Universal America (NYSE:UAM) as well as a new gap in the prescriptions market after Walgreen’s, the No. 1 U.S. drugstore, stopped filing prescriptions for patients of Express Scripts at the end of last year.
CVS chief executive, Larry Merlo, was optimistic that the company will only continue to benefit from the exodus of patients from Walgreens to other pharmacy managers.
"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,” he said. “We're optimistic about the opportunities and continue to feel very good about our position in the marketplace.”
CVS reported net income of $776 million in the latest quarter, or 60 cents a share, compared with a year-earlier $709 million, or 52 cents. Excluding one-time items, CVS earned 65 cents, topping average analyst estimates of 63 cents in a Thomson Reuters poll.
Revenue for the three-months ended March 31 was up 19.9% to a record $30.8 billion, up from $25.7 billion a year ago, trumping the Street’s view of $30.31 billion.
The gains were led by a 32.3% and 9.9% sales improvement in pharmacy services and retail pharmacy, respectively. Retail pharmacy same store sales, or those open longer than a year, climbed 8.4% during the latest period.