Pharmacy benefits manager CVS Caremark Corp. (CVS) is scheduled to report fourth-quarter results before the market opens Monday. The Woonsocket, Rhode Island-based company is expected to have benefited from demand for H1N1 vaccine in the fourth quarter. On average, 19 analysts polled by Thomson Reuters expect the company to earn $0.78 per share for the quarter with estimates ranging between $0.72 and $0.81 per share. Revenues for the quarter are estimated to be $26.22 billion. Analysts' estimates typically exclude special items.
During the fourth quarter, the drugstore operator appointed David Denton as Executive Vice President and Chief Financial Officer, effective January 1, replacing the retired David Rickard. CVS also announced the authorization of a new stock buyback program to repurchase up to $2 billion of its common stock. The authorization is to expire at the end of 2011.
The company operates through two segments, Pharmacy Services and Retail Pharmacy. For the fourth quarter of the previous fiscal, the company's net earnings available to common shareholders were $949.3 million or $0.65 per share. Net revenues for the quarter totaled $24.1 billion. These results included $111.1 million of intangible asset amortization related to acquisition activity.
For the third quarter, the company's net income available to common shareholders rose to $1.02 billion or $0.71 per share from $732.5 million or $0.50 per share in the prior-year quarter. The results included loss from discontinued operations of $1.8 million of lease-related costs, compared to a loss of $82.8 million or $0.06 per share of lease-related costs in the previous-year period. Net revenues for the third quarter increased to $24.64 billion from $20.86 billion in the year-ago quarter.
While announcing the third-quarter results, CVS narrowed its outlook for 2009 adjusted earnings per share from continuing operations, excluding the effect of the tax benefit, to $2.61-$2.64 per share from prior range of $2.59-$2.64 per share. For the full year, analysts look for earnings of $2.63 per share on revenues of $99.14 billion.
In fiscal 2008, net earnings available to common shareholders were $3.198 billion or $2.18 per share. Net revenues amounted to $87.472 billion. Pharmacy Services generated $43.769 billion and Retail Pharmacy reported revenues of $48.990 billion last year.
The company is likely to indicate today its expectations for 2010. Bloomberg reported on February 5 that profit at CVS and Walgreen Co. (WAG) may rise at least 20% from next year, as branded drugs with over $100 billion in sales become available as generics. Drugs losing patent protection include Pfizer Inc.'s cholesterol pill Lipitor and the blood thinner Plavix.
Among peers, Walgreen is expected to announce second-quarter results on March 23. Analysts look for earnings of $0.72 per share on revenues of $17.41 billion. In its first quarter, results for which were announced in December 2009, Walgreen reported about 20% increase in profit, helped by a 10% growth in prescription sales and a flu shot campaign that lifted front-end and pharmacy sales in September and October.
Rite Aid Corp. (RAD), another peer, is expected to report a loss of $0.19 per share on revenues of $6.56 billion when it reports fourth-quarter results. In December 2009, the drug store chain reported a narrower year-over-year loss for the third quarter, helped partly by lower charges related to store closings and impairment.
CVS closed Friday's regular trade at $31.07, down $0.08 or 0.26%, on 25.37 million shares. In the extended session, the stock added $1.17 or 3.77% and was trading at $32.24. For the past year, the shares traded in the range of $23.74-$38.27.
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