(By Balaseshan) CVS Caremark Corp. (NYSE: CVS) said it has reaffirmed its fiscal 2012 guidance and outlined 2013 forecast at its annual Analyst Day as part of its strategies to drive long-term growth and enhance shareholder value. Following the news, shares of CVS rose 4.44% in premarket.
For the fiscal 2012, the company reaffirmed its adjusted earnings guidance of $3.38 to $3.41 per share, while Street predicts $3.40 per share.
"Going into 2012, we set challenging, yet achievable, financial targets and I am pleased to report that we outperformed those expectations. Earnings per share and cash flow are expected to be solidly ahead of our initial plan. These strong results set the stage for continued enterprise growth in 2013 and beyond," said Larry Merlo, chief executive of CVS.
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For the fiscal 2013, the company expects to deliver adjusted earnings per share (EPS) from continuing operations of $3.84 to $3.98, an increase of 13.25% to 17.25%, while Street predicts $3.82. GAAP EPS from continuing operations is projected to be $3.59 to $3.73.
The company also expects to generate substantial free cash flow of $4.8 billion to $5.1 billion in 2013, and cash from operations of $6.4 billion to $6.6 billion in 2013. This guidance assumes the completion of $4 billion in share repurchases during 2013.
The 2013 guidance does not include the anticipated benefit from the company's recent debt tender and refinancing, which is expected to result in annual EPS accretion of approximately two cents due to the reduction of interest expense going forward.
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The company's chief financial officer Dave Denton also expressed confidence in the company's ability to achieve the steady state earnings growth targets established in late 2010, for 2011 through 2015.
The company also said its board has approved an increase in its quarterly dividend of about 38%, to $0.225 per common share, payable February 4, 2013, to holders of record on January 24, 2013. This increase translates into an annual rate of 90 cents per share, up 25 cents per share from the previous annual rate of 65 cents.
At the meeting, company executives outlined key challenges and opportunities emerging in the health care environment, highlighting how CVS Caremark is uniquely positioned to drive results in the rapidly-changing environment.
Merlo provided a strategic growth framework that is guiding the company's efforts to address the changing needs of customers and clients while capitalizing on its unique suite of assets to enhance shareholder value.
CVS closed Wednesday's regular session at $47.54. The stock has been trading between $36.44 and $49.23 for the past 52 weeks.