CVS Caremark (NYSE:CVS) revealed a higher fourth-quarter profit on much stronger pharmacy sales, as medical claims surged and the company acquired more customers through partnerships.
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The company also lifted its full-year and fiscal profit view, as it expects to continue winning over former Walgreen (NYSE:WAG) patrons who fill prescriptions with pharmacy benefits manager Express Scripts (NASDAQ:ESRX), after its rival stopped filling them earlier this year.
CVS has seen its membership grow sharply since acquiring the Medicare prescription drug arm of Universal American (NYSE:UAM) and teaming up with the nation’s third-largest heath insurer, Aetna (NYSE:AET), to offer Medicare plans.
The company’s deepened Medicare presence has allowed it to benefit from an expected surge in Medicare users as baby boomers continue to retire over the next few years.
The company saw growth of 32.4% in pharmacy services, a reflection of its partnerships with Aetna and Universal American, and a 4% improvement in retail sales.
Pharmacy networks claims processed during the October to December period jumped 46% to 193 million, and retail pharmacy same-store sales climbed 2.5%.
The Woonsocket, R.I.-based pharmacy and retail chain posted fourth-quarter net income of $1.1 billion, or 84 cents a share, compared with a year-earlier $1.02 billion, or 75 cents.
Excluding one-time items, the company eared 89 cents, matching average analyst estimates in a Thomson Reuters poll.
Revenue for the three months ended Dec. 31 was $28.3 billion, up 15.2% from $24.6 billion, just beating the Street’s view of $28.12 billion.
Looking deeper into 2012, CVS sees non-GAAP earnings in the range of $3.18 to $3.28 a share, in line with Wall Street expectations of $3.25. It raised the low and high end of its December forecast by 3 cents
“We have the right people, the right assets, and the right plans in place to continue to reinvent pharmacy and benefit from the changing health care landscape,” CVS chief executive Larry Merlo said in a statement. “Our substantial cash generation capabilities should enable us to continue to drive shareholder value now and in the years ahead.”
For the first quarter, it anticipates profit between 61 cents and 63 cents, up from an earlier forecast of 58 cents to 60 cents. Analysts are looking for a profit of 61 cents.