By Chelsey Dulaney
CVS Health Corp. bumped up the low end of its 2015 earnings
guidance on Friday but gave a soft outlook for its current
quarter.
Shares gained 0.5% in premarket trading as the company also
reported better-than-expected results for the first three months of
the year.
For the year, CVS now expects to deliver earnings of $5.08 to
$5.19 a share, compared with its previous guidance for $5.05 to
$5.19 a share in earnings.
For the current quarter, CVS forecast earnings of $1.17 to $1.20
a share. Analysts polled by Thomson Reuters had forecast $1.25 a
share in earnings.
The company has gotten a boost recently from its Medicaid
business, which has helped to offset retail sales declines in the
wake of the company's decision to stop selling cigarettes.
In the latest quarter, the pharmacy services business logged an
18% increase in revenue to $3.7 billion, driven by specialty
pharmacy and pharmacy network claims.
Pharmacy network claims grew 11%, due in part to growth in its
Medicaid program and public exchanges.
Overall sales excluding newly opened or closed stores increased
1.2%, as a 4.2% gain in pharmacy sales helped to counter a 6.1%
decline in sales at the front of the store, where cigarettes had
been sold before the company discontinued their sale in
September.
CVS has been embracing a broader health-care identity. In
addition to its antismoking moves, the company is expanding its
walk-in medical clinics and specialty-pharmacy services. The
company changed its name to CVS Health from CVS Caremark last
year.
Overall, the company reported a profit of $1.22 billion, or
$1.07 a share, up from $1.13 billion, or 95 cents a share, a year
earlier.
Excluding items, per-share earnings were $1.14 a share.
The company had forecast $1.06 to $1.09 a share in adjusted
per-share earnings.
Revenue grew 11% to $36.3 billion, topping the $35.9 billion
analysts had forecast.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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