(By Balachander) CVS Caremark Corp. (NYSE: CVS) boosted its earnings forecast for 2013 after the health care company posted better-than-expected quarterly earnings helped by a double-digit jump in pharmacy services revenue.
Adjusted earnings per share (EPS) jumped 28 percent to $1.14, beating market expectations of $1.10 for the fourth quarter.
Earnings attributable to CVS Caremark increased 2.7 percent to $1.13 billion.
Revenue climbed 11 percent to $31.4 billion, versus expectations of $31.1 billion. Revenue at the company's pharmacy services and retail pharmacy segments gained 17.4 percent and 5.1 percent, respectively. Retail pharmacy segment same stores sales grew 4.0 percent.
"Both the PBM and retail segments turned in strong performances at the high end of our expectations," commented CEO Larry Merlo. "And we also realized below-the-line benefits in the quarter from a lower effective tax rate and fewer shares than we originally anticipated, resulting in EPS exceeding the high end of our guidance by approximately three cents per share."
The company attributed the jump in pharmacy services revenue to new client starts related to its 2012 selling season, drug cost inflation, and the growth of its Medicare Part D program.
Pharmacy network claims processed rose 6.5 percent to 205.5 million for the fourth quarter ended Dec. 31.
The company continues to see EPS from continuing operations of $0.77 to $0.80 for the first quarter, while analysts expect 79 cents.
For 2013, CVS now expects adjusted EPS in the range of $3.86 to $4.00 from prior expectations of $3.84 to $3.98, while analysts expect $3.94.
The stock, which has been trading in the 52-week range between $42.43 and $52.73, ended Tuesday's regular trading at $51.72.