Medco Health Solutions Inc. Fourth Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Medco Health Solutions, Inc. (NYSE:MHS) will unveil its latest earnings on Tuesday, February 21, 2012. Medco Health Solutions offers clinically-driven pharmacy services for private and public employers, health plans, labor unions, and government agencies.

Medco Health Solutions, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of $1.17 per share, a rise of 24.5% from the company’s actual earnings for the year-ago quarter. The average estimate is the same as three months ago. Between one and three months ago, the average estimate was unchanged. It also has not changed during the last month. Analysts are projecting profit to rise by 20.6% compared to last year’s $4.10.

Past Earnings Performance: Last quarter, the company reported net income of $1.07 per share versus a mean estimate of profit of. The company has beaten estimates for the past three quarters.

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Wall St. Revenue Expectations: On average, analysts predict $17.47 billion in revenue this quarter, a rise of 3.2% from the year-ago quarter. Analysts are forecasting total revenue of $68.48 billion for the year, a rise of 3.8% from last year’s revenue of $65.97 billion.

Analyst Ratings: 10 out of 19 analysts surveyed (52.6%) have a buy rating on Medco Health Solutions. This is below the mean analyst rating of 10 competitors, which average 72.8% buy ratings. Over the past 90 days, the average rating for the stock has moved up from hold to moderate buy.

A Look Back: In the third quarter, profit fell 4.3% to $355.4 million (90 cents a share) from $371.5 million (85 cents a share) the year earlier, but exceeded analyst expectations. Revenue rose 4.1% to $16.98 billion from $16.32 billion.

Key Stats:

For four quarters in a row, revenue has increased. Revenue rose 4.1% in the second quarter from the year earlier, climbed 4.3% in the first quarter from the year-ago quarter and 11.1% in the fourth quarter of the last fiscal year.

The company’s net income has fallen in the last two quarters. Net income dropped 4% in the second quarter.

Stock Price Performance: Between December 16, 2011 and February 15, 2012, the stock price had risen $8.77 (16.1%), from $54.63 to $63.40. The stock price saw one of its best stretches over the last year between March 23, 2011 and April 4, 2011, when shares rose for nine straight days, increasing 9% (+$4.72) over that span. It saw one of its worst periods between July 22, 2011 and August 8, 2011 when shares fell for 12 straight days, dropping 22.7% (-$14.98) over that span.

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

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com