CVS Health's first-quarter earnings, fueled by specialty drug claims, climbed 8 percent and easily topped Wall Street expectations.
The Woonsocket, Rhode Island, company said Friday that revenue from its pharmacy benefits management business jumped 18 percent to nearly $23 billion. Driving sales were pricey specialty drugs, which are complex medicines that can represent treatment breakthroughs but often at a much higher cost than other drugs.
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Those sales helped offset slower growth from the company's drugstore segment, where revenue climbed 3 percent.
Pharmacy benefits managers help negotiate the prices that customers pay for prescription drugs. They are seen as a key component in the push to contain soaring costs from specialty drugs.
Overall, CVS Health earned $1.22 billion, up from $1.13 billion in last year's quarter. Earnings in the most recent quarter, adjusted for one-time gains and costs, were $1.14 per share.
That was better than the per-share earnings of $1.08 that Wall Street had expected, according to a survey by Zacks Investment Research.
Revenue grew 11 percent in the quarter to $36.33 billion, also beating forecasts.
Nineteen analysts surveyed by Zacks expected $35.92 billion.
For the current quarter ending in June, CVS Health expects its per-share earnings to range from $1.17 to $1.20. Analysts surveyed by Zacks had forecast adjusted earnings per share of $1.25.
The company also raised the bottom end of its 2015 earnings forecast by three cents, resulting in a new expectation for $5.08 to $5.19 per share.
Analysts expect, on average, $5.16 per share, according to FactSet.
The company operated 7,850 retail locations at the end of the first quarter, a total that trails only Walgreens Boots Alliance Inc.
CVS Health Corp. shares edged up 51 cents to $99.80 Friday before markets opened. The shares have risen about 3 percent since the beginning of the year, while the Standard & Poor's 500 index has climbed slightly more than 1 percent. The stock has climbed 37 percent in the last 12 months.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on CVS at http://www.zacks.com/ap/CVS
Keywords: CVS Health, Earnings Report, Priority Earnings