WOONSOCKET – CVS Caremark Corp. on Tuesday reported a record first-quarter profit despite softer-than-expected winter retail sales caused by severe weather and a mild flu season.
CVS posted net income of $770 million, or 56 cents a share, in the three months ended March 31, compared with a profit of $738 million, or 51 cents a share, a year earlier. Revenue rose 1.6 percent to $23.8 billion.
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Excluding one-time charges, CVS said it earned 60 cents, beating the average estimate of 58 cents among 15 analysts surveyed by Bloomberg. Revenue missed the $24.14 billion forecast among analysts polled by Thomson Reuters.
CVS Chairman, President and CEO Thomas M. Ryan said he was “very pleased” with the results, which he attributed to “continued market share gains and better expense leverage.”
At CVS/pharmacy stores, drugstore revenue rose 3.6 percent to $14 billion, with sales at stores open for more than a year rising 2.3 percent.
Same-store pharmacy sales rose 3.7 percent, but same-store sales of general merchandise fell 0.7 percent. CVS said a weak flu season and severe weather in certain markets, as well as a later Easter, hurt same-store sales compared with last year.
Revenue at CVS’ pharmacy-benefit management division, which lost $4.8 billion in contracts for this year, increased 2.6 percent to $11.8 billion even as the unit processed 10.3 percent fewer retail network claims after losing major clients.
“The bottom-line number looks good, but it’s not quite the composition we had expected, with retail same-store sales coming in a bit light,” Helene Wolk, an analyst at Sanford C. Bernstein & Co., told Dow Jones Newswires.
Generic drugs made up 72.1 percent of retail prescriptions and 70.4 percent of PBM prescriptions filled during the quarter.
The company said it operated 7,063 drugstores in 44 states, Washington, D.C., and Puerto Rico as of March 31, fewer than rival Walgreen Co., which has almost 7,500 stores.
CVS also raised the lower end of its forecast for full-year adjusted earnings from continuing operations by 3 cents to $2.77 a share, keeping its maximum projection of $2.84.
Additional information is available at cvscaremark.com.
