CVS Caremark Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component CVS Caremark (NYSE:CVS) will unveil its latest earnings on Tuesday, November 6, 2012. CVS Caremark provides prescriptions and related health care services and products.

CVS Caremark Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of 84 cents per share, a rise of 20% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved up from 83 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 84 cents during the last month. Analysts are projecting profit to rise by 19.6% compared to last year’s $3.35.

Past Earnings Performance: The company is looking to make a streak of three quarters of beating estimates. Last quarter, it beat expectations by reporting net income of 81 cents per share, and the previous quarter, it had profit of 65 cents.

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A Look Back: In the second quarter, profit rose 18.4% to $966 million (75 cents a share) from $816 million (60 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 15.3% to $30.71 billion from $26.63 billion.

Wall St. Revenue Expectations: On average, analysts predict $31 billion in revenue this quarter, a rise of 16.4% from the year-ago quarter. Analysts are forecasting total revenue of $123.01 billion for the year, a rise of 14.9% from last year’s revenue of $107.1 billion.

Stock Price Performance: Between August 7, 2012 and October 31, 2012, the stock price rose $2.28 (5.2%), from $44.12 to $46.40. The stock price saw one of its best stretches over the last year between December 19, 2011 and December 29, 2011, when shares rose for eight straight days, increasing 12.6% (+$4.60) over that span. It saw one of its worst periods between October 10, 2012 and October 19, 2012 when shares fell for eight straight days, dropping 3.9% (-$1.86) over that span.

Key Stats:

With double-digit revenue growth the past four quarters, this earnings release is a chance to keep that positive trend going. The company has averaged year-over-year revenue growth of 15.1% over the last four quarters.

This upcoming earnings announcement will be a chance to build on positive earnings momentum over the last three quarters. Net income rose 3.7% in the fourth quarter of the last fiscal year and 8.8% in the first quarter before increasing again in the second quarter.

Analyst Ratings: With 17 analysts rating the stock a buy, none rating it a sell and two rating the stock a hold, there are indications of a bullish stance by analysts.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.47 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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