Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Practice Management > Building Your Business

CVS profit in line with estimates as pharmacy sales increase

Your article was successfully shared with the contacts you provided.

(Bloomberg) — CVS Health Corp. (NYSE:CVS) earnings matched analysts’ earnings estimates in the fourth quarter, after the August acquisition of nursing-home pharmacy Omnicare helped drive sales growth at its drugstores.

Earnings were $1.53 a share excluding one-time items, the Woonsocket, R.I.-based company said in a statement, reiterating its 2016 earnings forecast. Fourth-quarter sales in the retail-pharmacies division rose 12 percent, with about half of the increase coming from the long-term care business bought as part of Omnicare. That deal also boosted revenue at the pharmacy benefit management (PBM) business, which contracts with health insurers and employers.

Fourth-quarter net income rose to $1.5 billion, or $1.34 a share, from $1.3 billion, or $1.14, a year earlier. Revenue increased 11 percent to $41 billion.

CVS has been bulking up through acquisitions. Last year it bought Omnicare for $13 billion and the pharmacy locations inside Target Corp. stores for $1.9 billion. Competitors are growing, too. OptumRX, the PBM arm of UnitedHealth Group Inc. (NYSE:UNH), bought benefit-management company Catamaran Corp. in July 2015. In addition, Walgreens Boots Alliance Inc.’s agreement last year to purchase Rite Aid Corp. could threaten CVS’s market share in the retail-pharmacy market.

CVS also said:

  • Same-store sales increased 3.5 percent.

  • Pharmacy-services revenue increased 11 percent, primarily driven by growth in specialty pharmacy, including the impact of Omnicare.

See also: