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CVS profit beats estimates on higher pharmacy claims

BY Reuters — 7:57 AM ET 05/01/2015

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CVS Health Corp (CVS), the No.2 U.S drugstore operator, reported a better-than-expected quarterly profit on Friday, helped by higher revenue from its specialty pharmacy services and an increase in pharmacy network claims.

CVS also tightened its 2015 adjusted profit forecast to $5.08-$5.19 per share from $5.05-$5.19.

Same-store sales increased 1.2 percent in the first quarter ended March 31, handily beating the 0.6 percent forecast by analysts, according to research firm Consensus Metrix.

Revenue in CVS's pharmacy services business rose 18.2 percent to $23.9 billion. That helped total net revenue increase 11 percent to $36.33 billion in the quarter.

The number of pharmacy network claims CVS processed grew 11 percent to 230.8 million, helped by more claims from its Medicaid management business and public exchanges.

Claims volume also grew in CVS's specialty pharmacy business. One of CVS's top priorities has been to develop the business, which provides medication and services for complex diseases such as multiple sclerosis, hepatitis C and cancer.

The company's net income rose 8.1 percent to $1.22 billion, or $1.07 per share, in the quarter. Excluding one-time items, CVS earned $1.14 per share.

Analysts on average had expected a profit of $1.08 per share on revenue of $35.93 billion, according to Thomson Reuters I/B/E/S. (Reporting by Nandita Bose in Chicago and Sruthi Ramakrishnan in Bengaluru; Editing by Maju Samuel and Savio D'Souza)