CVS Caremark 3Q profit rises 7 percent

November 3, 2011 - 8:10 AM

WOONSOCKET, R.I. (AP) — CVS Caremark Corp.'s third-quarter earnings climbed 7 percent, as a long-term contract and acquisition boosted the pharmacy network claims it processed.

The Woonsocket, R.I., company also raised the low end of its full-year profit forecast.

CVS Caremark said Thursday that it earned $868 million, or 65 cents per share, in the three months that ended Sept. 30. That compares with $809 million, or 59 cents per share, a year ago.

Adjusted earnings, which exclude amortization tied to acquisitions, were 70 cents per share.

Revenue grew 12 percent to $26.67 billion.

FactSet says analysts expected a profit of 67 cents per share and $26.76 billion in revenue.

CVS Caremark runs the second-largest chain of drugstores in the U.S., after Walgreen Co. CVS had 7,384 locations at the end of the quarter, up from 7,152 a year ago. Its Caremark business is one of the largest pharmacy benefits managers, which handle drug benefits for health plan members and sponsors.

Revenue from its pharmacy services business climbed 26 percent because of a long-term contract with health insurer Aetna Inc. and the acquisition of Universal American Corp.'s Medicare prescription drug business. Pharmacy network claims processed during the quarter rose 40 percent to 179.2 million.

Total revenue from drugstores rose 4 percent to $14.7 billion. Revenue at stores open at least a year, a key measurement of retailer health, grew 2.3 percent.

The company now expects 2011 adjusted earnings of $2.77 to $2.81 per share, compared with its previous forecast of $2.75 to $2.81 per share.

Analysts expect earnings of $2.76 per share.