Express Scripts 2Q profit down, but lifts guidance
Wednesday, August 8, 2012
ST. LOUIS (AP) — Express Scripts Holding Co. said Tuesday its earnings fell 49 percent in the second quarter, its first after wrapping up its $29 billion acquisition of competitor Medco Health Solutions. However, the pharmacy benefits manager boosted its profit expectations based on better-than-expected savings from the combined businesses.
The St. Louis company earned $170.9 million, or 21 cents per share, in the three months that ended June 30. That compares to earnings of $334.2 million, or 66 cents per share, in last year’s second quarter. Revenue more than doubled to $27.69 billion with the Medco acquisition. The company filled 404.3 million adjusted prescriptions, up 118 percent from a year ago. Adjusted prescriptions measure 90-day mail order prescriptions as three regular 30-day prescriptions.
Excluding costs related to the deal, the company would have earned 88 cents per share.
Analysts forecast earnings of 82 cents per share on $26.58 billion in revenue, according to FactSet.
Express Scripts closed its purchase of fellow pharmacy benefits manager Medco Health Solutions in early April. The deal, which was announced last summer, created a company big enough to handle the prescriptions of about 135 million people, or more than one in three Americans.
Express Scripts said it expects to create $1 billion in annual savings after it fully integrates Medco into its business.
Citing better-than-expected integration savings in the quarter, Express Scripts raised its full-year guidance to between $3.60 and $3.75 per share, from a range of $3.36 and $3.66 per share. The company expects to fill 1.4 billion adjusted prescriptions for the year.
Analysts expect annual earnings per share of $3.53, on average.
Company shares rose $4.01, or 7.2 percent, to $60.03 in after-hours trading, after gaining 4 cents during regular trading.
Express Scripts also announced last month that it will start working again with Walgreen Co., the nation’s largest drugstore chain. The companies had stopped doing business at the end of last year after they couldn’t agree to a new contract. They declined to elaborate on terms of their new deal, which starts Sept. 15.
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