Express Scripts Earnings: Strong Margins Continue, Stock POPS

Rising costs hurt S&P 500 (NYSE:SPY) component Express Scripts Holding Company (NASDAQ:ESRX) in the second quarter as profit dropped from a year earlier. Express Scripts is a pharmacy benefit management company, providing services like retail network pharmacy management and patient care contact centers to its clients in North America.

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Express Scripts Holding Company Earnings Cheat Sheet

Results: Net income for the medical services fell to $170.9 million (21 cents per share) vs. $334.2 million (66 cents per share) a year earlier. This is a decline of 48.9% from the year-earlier quarter.

Revenue: Rose more than twofold to $27.69 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Express Scripts Holding Company fell short of the mean analyst estimate of 82 cents per share. It beat the average revenue estimate of $11.47 billion.

Quoting Management: “Our strong second quarter results, the first as a combined organization, demonstrate the continued execution of our business model of alignment,” stated George Paz, chairman and chief executive officer. “We are fully underway with the integration process and will continue to focus on lowering healthcare costs while improving health outcomes. As a result of our steadfast commitment to providing exemplary service and innovative offerings to clients and patients, we are experiencing strong retention rates.”

Key Stats:

Revenue has increased for four consecutive quarters. Revenue increased 9.4% to $12.13 billion in the first quarter. The figure rose 7.1% in the fourth quarter of the last fiscal year from the year earlier and climbed 2.8% in the third quarter of the last fiscal year from the year-ago quarter.

The company has now seen its net income fall for three quarters in a row. In the first quarter, net income fell 18% from the year earlier, while the figure fell 11.9% in the fourth quarter of the last fiscal year.

The company has now fallen short of analyst estimates for the last three quarters. It missed the mark by 4 cents in the first quarter and by 3 cents in the fourth quarter of the last fiscal year.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the third quarter is 91 cents per share, down from 95 cents ninety days ago. At $3.53 per share, the average estimate for the fiscal year has fallen from $3.65 ninety days ago.

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

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