CVS Health, the No. 2 U.S. drugstore chain by store count, reported better-than-expected profit helped by strong demand for its pharmacy benefit management (PBM) services.
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Revenue in CVS's PBM business rose 20.7 percent to $5.1 billion in the second quarter ended June 30, due to increased pharmacy network claim volume and growth in specialty pharmacy.
"We see 2017 shaping up to be another very successful PBM selling season, with substantial gross and net new business to date," Chief Executive Larry Merlo said.
The Woonsocket, Rhode Island-based company raised full-year adjusted earnings to $5.81-$5.89 per share, from $5.73-$5.88 it had expected earlier.
CVS boosted its specialty pharmacy business, which provides drugs to people with expensive chronic conditions such as rheumatoid arthritis, with its $10.1 billion acquisition of Omnicare Inc in August 2015.
Net income attributable to CVS Health fell to $924 million, or 86 cents per share, from $1.27 billion, or $1.12 per share, a year earlier.
Excluding items, CVS earned $1.32 per share.
The company's net revenue rose 17.6 percent to $43.73 billion, rising by double-digit percentages for the fourth straight quarter.
Analysts on average expected profit of $1.30 per share on revenue of $44.28 billion, according to Thomson Reuters I/B/E/S.
(Reporting by Subrat Patnaik in Bengaluru; Editing by Saumyadeb Chakrabarty and Shounak Dasgupta)