Medco Health Solutions, Inc. Earnings Cheat Sheet: Snaps Strong Streak with Profit Drop

S&P 500 (NYSE:SPY) component Medco Health Solutions, Inc. (NYSE:MHS) reported its results for the second quarter. Medco Health Solutions Inc. offers clinically-driven pharmacy services for private and public employers, health plans, labor unions and government agencies.

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Medco Health Solutions Earnings Cheat Sheet for the Second Quarter

Results: Net income for the drug wholesaler fell to $342.8 million (85 cents per share) vs. $356.9 million (77 cents per share) a year earlier. This is a decline of 4% from the year earlier quarter.

Revenue: Rose 4.1% to $17.07 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: MHS reported adjusted net income of 96 cents per share. By that measure, the company beat the mean estimate of 94 cents per share. Analysts were expecting revenue of $17.08 billion.

Quoting Management: “Medco’s second-quarter results are characterized by strong performance across the enterprise. We generated record revenues that include a 43.3 percent increase in service revenues driven primarily by UnitedBioSource Corp (NYSE:UBC) and growth across our portfolio of service offerings. Record specialty operating income, continued strong performance in Medicare, and record generic mail-order volume and generic dispensing rates also contributed to our earnings per share growth this quarter. Importantly, our margin percentage profile is stable and expected to grow in the future,” said David B. Snow Jr., chairman and chief executive officer of Medco

Key Stats:

Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the first quarter, net income rose 3.9% from the year earlier, while the figure increased 10.8% in the fourth quarter of the last fiscal year, 10.7% in the third quarter of the last fiscal year and 14.4% in the second quarter of the last fiscal year.

Revenue has risen the past four quarters. Revenue increased 4.3% to $17.02 billion in the first quarter. The figure rose 11.1% in the fourth quarter of the last fiscal year from the year earlier and climbed 10.3% in the third quarter of the last fiscal year from the year-ago quarter.

The company has now beaten estimates the last two quarters. In the first quarter, it topped expectations with net income of 91 cents versus a mean estimate of net income of 88 cents per share.

Competitors to Watch: Express Scripts, Inc. (NASDAQ:ESRX), BioScrip Inc. (NASDAQ:BIOS), Catalyst Health Solutions, Inc. (NASDAQ:CHSI), UnitedHealth Group Inc. (NYSE:UNH), CVS Caremark Corporation (NYSE:CVS), Walgreen Company (NYSE:WAG), Aetna Inc. (NYSE:AET), Magellan Health Services, Inc. (NASDAQ:MGLN), SXC Health Solutions Corp. (NASDAQ:SXCI), and Birner Dental Mgmt. Services (NASDAQ:BDMS).

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(Source: Xignite Financials)