Drugstore chain and prescription benefits manager CVS Caremark (NYSE:CVS) beat first-quarter expectations as it benefited from competitor Walgreen’s (NYSE:WAG) contractual dispute with Express Scripts (NASDAQ:ESRX), and its own acquisition of Universal American Corp.’s (NYSE:UAM) Medicare unit.
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CVS earned $776 million (59 cents a share) compared to $713 million (52 cents per share) in the year-ago period. Revenue grew 20 percent to $30.8 billion. On an adjusted basis earnings were 65 cents a share and better than analysts’ expectations of 62 cents a share.
According to the company, it derived “significant benefit” from the aforesaid dispute between Walgreen and Express Scripts because customers switched allegiance to CVS.
Same store sales rose over 8 percent and drugstore sales were higher by 10 percent despite a weak flu season and the impact of some generic drugs.
The pharmacy benefits management business segment of the company saw revenues shooting up by 32 percent mainly due to the impact of the company’s acquisition of Universal’s Medicare prescription business. This segment also captured $7.1 billion in new business, adding marquee customers such as IBM (NYSE:IBM).
CVS improved its previous forecast for 2012 adjusted earnings from a range of $3.18 to $3.28 a share to $3.23 to $3.33 a share. Analysts expected 2012 earnings at $3.29 per share.