WOONSOCKET – CVS Caremark Corp. reported second-quarter profit and sales that rose more than analysts estimated on contributions from pharmacy-benefits manager Caremark RX Inc., which CVS bought for $27 billion in March, Bloomber News Service reported Thursday
Net income more than doubled to $723.6 million, or 47 cents a share, from $337.9 million, or 40 cents, a year earlier. Sales increased 96 percent to $20.7 billion, the company said today.
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CVS said third-quarter per-share earnings will jump as much as 33 percent, and repeated its annual profit outlook. CVS, the second-biggest U.S. drugstore chain, bought Caremark to add mail- order pharmacies to its network of stores. The second quarter was the first to include a full three months of Caremark results.
“Simply put, both businesses are performing well,” John Heinbockel, an analyst at Goldman, Sachs & Co., wrote in a note today. The second-quarter results provide “additional confidence in the strategic wisdom of the merger.”
Analysts estimated profit of 46 cents a share, the average of 14 projections compiled by Bloomberg. Nine analysts estimated sales, on average, of $20.6 billion.
Shares of CVS, based in Woonsocket, Rhode Island, rose $1.27, or 3.6 percent, to $36.81 at 12:59 p.m. in New York Stock Exchange composite trading. Before today, they had climbed 15 percent this year. Shares of rival Walgreen Co., the biggest U.S. drugstore chain by sales, have dropped 2.5 percent.
CVS benefited from demand for generic versions of drugs such as the sleeping pill Ambien. Generics are more profitable for CVS because it can negotiate better prices when several companies sell the same pill. That isn’t the case when only the developer, protected by patents, is making the drug.
