CVS Caremark (NYSE:CVS) reported on Thursday a stronger third-quarter profit that surpassed Wall Street expectations, as pharmacy service revenues climbed on new business from its recently acquired Medicare group.
The strong results led the company to tighten its fiscal 2011 guidance range toward the higher end of its previous range. For the full-year, the company now expects non-GAAP earnings of $2.77 to $2.81 a share, compared with its earlier view between $2.75 and $2.81 a share.
Wall Street is expecting a fiscal profit of $2.78 a share.
The pharmacy and retail store operator posted net income of $867 million, or 65 cents a share, compared with $808 million, or 59 cents a share, in the same quarter last year.
Excluding special items, the company said it earned 70 cents a share, which is ahead of average analyst estimates polled by Thomson Reuters of 68 cents a share.
“I’m very pleased with our third quarter results, which were two cents above the high end of our guidance range,” CVS chief executive Larry Merlo said in a statement.
Revenue for the three-month period was up 15% to $26.7 billion, from $23.7 billion a year ago. The results virtually matched the Street’s view of $26.75 billion.
The gains were driven by 25.8% growth to $14.8 billion in its pharmacy services group as a result of a key partnership with Aetna (NYSE:AET) and its purchase of the Medicare prescription drug business of Universal American (NYSE:UAM).
Pharmacy network claims processed during the three months ended Sept. 30 were up nearly 40% to 179.2 million compare with just 128.2 million in the year-earlier period.