CVS Caremark's first-quarter earnings jumped 18 percent as generic drugs and an acquisition helped the drugstore chain and pharmacy benefits manager weather rough winter storms.
The company runs the nation's second-largest drugstore chain, with many of its nearly 7,700 stores on the East Coast and in the Midwest, areas blasted by snow storms and sub-zero temperatures this past winter. CVS Caremark said that weather, plus a weaker flu season compared to last year, hurt sales at its established stores.
CEO Larry Merlo told analysts during a Friday conference call that the company normally doesn't blame the weather when it explains results, but it was making an exception.
"This quarter, the amount of extreme weather was so abnormal that, quite frankly, it's hard not to talk about it," he said.
CVS Caremark Corp. also runs one of the biggest pharmacy benefits management operations, and that segment played a large role in its growth during the quarter. Sales from that unit, which runs prescription drug plans for employers and other clients, climbed more than 10 percent to top $20 billion in the quarter. It was helped in part by rising drug prices, as well as the company's acquisition of the drug infusion business Coram.
Growth in generic drug use also helped the company's bottom line, as it has done for several quarters now for CVS and other drugstores. Generics, which are cheaper than brand-name drugs, provide a wider margin between the cost for the pharmacy to purchase the drugs and the reimbursement it receives.
CVS earned $1.13 billion, or 95 cents per share, in the three months that ended March 31. That compares with earnings of $954 million, or 77 cents per share, in last year's quarter. Revenue climbed 6 percent to $32.69 billion.
Adjusted results totaled $1.02 per share. That was 2 cents shy of Wall Street expectations and a penny lower than what the company expected.
But CVS Caremark beat analyst projections for revenue of $32.3 billion in revenue, according to FactSet.
The company also reaffirmed on Friday a forecast it first made in December for 2014 adjusted earnings of between $4.36 and $4.50 per share. Analysts expect earnings of $4.47 per share.
CVS Caremark gained national attention in February after vowing to phase out tobacco products from its stores by October. CVS anticipates a $2-billion hit to its revenue because of the decision, but it doesn't expect the move to affect its earnings forecast.
The company, like other drugstore chains, has been raising its focus on health care by adding in-store clinics and seeking to work more with doctors and hospitals to manage patient care. Company leaders told analysts on Friday that they don't expect the products they put in tobacco's shelf space to replace the lost revenue from cigarettes and cigars, but they do expect to gain health care business because of the move.
Company shares climbed 29 cents to $73.38 in midday trading, while broader indexes were largely flat.
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CVS Caremark 1Q profit jumps 9 percent CVS Caremark's 1st-quarter profit climbs 9 pct; or PBM, segment climbed 32 percent to $18.3 billion,
CVS Caremark 1Q profit jumps 9 percent - Yahoo News
CVS Caremark Corp. gained millions of new prescriptions in the CVS Caremark 1Q profit jumps 9 percent. segment climbed 32 percent to $18.3
CVS Caremark profit jumps 18 pct; boosts outlook - WTOP.com
CVS Caremark Corp.'s second-quarter net income jumped 18.4 percent, CVS Caremark profit jumps 18 pct; boosts outlook .
CVS Caremark 1Q profit jumps 9 percent - Alliance Review ...
CVS Caremark 1Q profit jumps 9 percent. TOM MURPHY AP Business Writer Published: May 2, 2012 6:31PM. segment climbed 32 percent to $18.3 billion,
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CVS Caremark says its first-quarter earnings rose 9 CVS Caremark 1Q profit jumps 9 percent. segment climbed 32 percent to $18.3 billion,
CVS Caremark 1Q profit jumps 9 percent - Thehour.com: Business
CVS Caremark 1Q profit jumps 9 percent. FILE - A May 3, or PBM, segment climbed 32 percent to $18.3 billion,
CVS Caremark 1Q profit jumps 9 percent - Business - The ...
CVS Caremark 1Q profit jumps 9 percent. CVS Caremark Corp. gained millions of new prescriptions in the segment climbed 32 percent to $18.3
CVS Caremark profit jumps 18 pct; boosts outlook - Yahoo ...
CVS Caremark profit jumps 18 pct; boosts outlook CVS Caremark's 2nd-quarter profit climbs 18 percent; outlook rises for drugstore chain, PBM.
CVS profit jumps 18 percent, boosts outlook - CBS News
CVS profit jumps 18 percent, boosts outlook. In a July 17, 2012 photo, a CVS drug store is lit up in Doral, Fla. CVS Caremark said Tuesday Aug. 7, 2012,
CVS Caremark 1Q profit soars 23 percent - Yahoo! News
CVS Caremark 1Q profit soars 23 percent CVS Caremark's 1st quarter profit jumps 23 percent, helped by impact from generic drugs.
