Express Scripts Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Express Scripts (NASDAQ:ESRX) will unveil its latest earnings on Monday, November 5, 2012. 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.

Express Scripts Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of 99 cents per share, a rise of 25.3% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved up from 91 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 99 cents during the last month. Analysts are projecting profit to rise by 24.6% versus last year to $3.70.

Past Earnings Performance: The company beat estimates last quarter after falling short in the prior two. In the second quarter, the company reported net income of 88 cents per share versus a mean estimate of profit of 82 cents per share. In the first quarter, the company missed estimates by 4 cents.

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Wall St. Revenue Expectations: On average, analysts predict $27.48 billion in revenue this quarter, a rise of more than twofold from the year-ago quarter. Analysts are forecasting total revenue of $95.15 billion for the year, a rise of more than twofold from last year’s revenue of $46.13 billion.

A Look Back: In the second quarter, profit fell 48.9% to $170.9 million (21 cents a share) from $334.2 million (66 cents a share) the year earlier, but exceeded analyst expectations. Revenue rose more than twofold to $27.69 billion from $11.36 billion.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 0.75 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, a ratio less than one could indicate a company may have difficulty meeting current obligations. The company regressed in this liquidity measure from 2.14 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased more than twofold to $12.84 billion while assets decreased 20.2% to $9.66 billion.

Key Stats:

On the top line, the company is looking to build on three-straight revenue increases heading into this earnings announcement. Revenue increased 7.1% in the fourth quarter of the last fiscal year and 9.4% in the first quarter before climbing again in the second quarter.

Stock Price Performance: Between August 6, 2012 and October 30, 2012, the stock price rose $6.26 (11.2%), from $55.98 to $62.24. The stock price saw one of its best stretches over the last year between December 28, 2011 and January 9, 2012, when shares rose for eight straight days, increasing 13.7% (+$6) over that span. It saw one of its worst periods between May 11, 2012 and May 18, 2012 when shares fell for six straight days, dropping 7.7% (-$4.22) over that span.

Analyst Ratings: With 18 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.

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

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