CVS Caremark Earnings: Snaps Cold Streak with Profit Growth

S&P 500 (NYSE:SPY) component CVS Caremark Corporation (NYSE:CVS) reported its results for the third quarter. CVS Caremark provides prescriptions and related health care services and products.

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CVS Caremark Earnings Cheat Sheet for the Third Quarter

Results: Net income for the drug store rose to $868 million (65 cents per share) vs. $809 million (59 cents per share) in the same quarter a year earlier. This marks a rise of 7.3% from the year earlier quarter.

Revenue: Rose 12.5% to $26.67 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: CVS reported adjusted net income of 70 cents per share. By that measure, the company beat the mean estimate of 67 cents per share. Analysts were expecting revenue of $26.77 billion.

Quoting Management: Larry Merlo, President and Chief Executive Officer, stated, “I’m very pleased with our third quarter results, which were two cents above the high end of our guidance range. This outperformance was primarily driven by better-than-expected performance in our PBM as well as accretion from our recently-executed $1 billion accelerated share repurchase. Between dividends and share repurchases, we have returned over $3 billion to our shareholders year to date and enhancing shareholder returns remains a high priority for us.”

Key Stats:

Last quarter’s profit increase breaks a streak of four consecutive quarters of year-over-year profit drops. In the second quarter, net income fell 0.6% from the year earlier, while the figure fell 7.5% in the first quarter, 2.3% in the fourth quarter of the last fiscal year and 20.8% in the third quarter of the last fiscal year.

The company has now topped analyst estimates for the last four quarters. It beat the mark by one cent in the second quarter, by 2 cents in the first quarter, and by one cent in the fourth quarter of the last fiscal year.

Revenue has now gone up for three straight quarters. In the second quarter, revenue rose 10.9% to $26.63 billion while the figure rose 8.9% in the first quarter from the year earlier.

Looking Forward: For next quarter, analysts have a more positive outlook about the company’s expected results. The average estimate for the fourth quarter is 89 cents per share, up from 88 cents ninety days ago. The average estimate hasn’t changed from $2.78 per share for the fiscal year.

Competitors to Watch: Walgreen Company (NYSE:WAG), Rite Aid Corporation (NYSE:RAD), PharMerica Corporation (NYSE:PMC), Medco Health Solutions Inc. (NYSE:MHS),, inc. (NASDAQ:DSCM), PetMed Express, Inc. (NASDAQ:PETS), Wal-Mart (NYSE:WMT), Target (NYSE:TGT), Graymark Healthcare Inc (NASDAQ:GRMH), BioScrip Inc. (NASDAQ:BIOS).

Investing Insights: Here’s Why Chipotle’s Stock Keeps Winning.

(Source: Xignite Financials)