WOONSOCKET – CVS Caremark Corp. said Thursday its first quarter net income dropped to $713 million from $771 million, and also denied plans to split up the drugstore chain and pharmacy benefit management units.
Recent news reports say there is shareholder pressure pushing the breakup, four years after CVS bought Caremark RX Inc.; Bloomberg News estimated the breakup’s value at $25 billion.
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“We know the growth in our PBM segment has been disappointing and we are keenly focused on returning to operating growth,” CEO Larry Merlo, who assumed the role in March after longtime CEO Thomas Ryan stepped down, said on a conference call to discuss the results.
“Despite conjecture in the marketplace, there are no plans to split up the company,” Merlo said, according to the Dow Jones Newswire, and doing so would be a “step in the wrong direction.”
For the three months ended March 31, CVS’ revenue increased to $25.88 billion from $23.76 billion. Revenue in the pharmacy services segment increased 18.4 percent to $14.0 billion primarily due to a previously-announced long-term contract with Aetna Inc.
Net income was 52 cents per share, compared to 55 cents per share as seen in the first quarter 2010.
