Medco Health Solutions Inc. Third Quarter Earnings on Deck

S&P 500 (NYSE:SPY) component Medco Health Solutions, Inc. (NYSE:MHS) will unveil its latest earnings on Wednesday, October 26, 2011. 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 estimate of analysts is for net income of $1.05 per share, a rise of 15.4% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from $1.06. Between one and three months ago, the average estimate moved down. It has been unchanged at $1.05 during the last month. Analysts are projecting profit to rise by 20% versus last year to $4.08.

Past Earnings Performance: The company is looking to beat analyst estimates for the third quarter in a row. Last quarter, it beat estimates with profit of 96 cents per share against the mean estimate of 94 cents. In the prior quarter, the company reported net income of 91 cents.

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Wall St. Revenue Expectations: Analysts are projecting a rise of 4.5% in revenue from the year-earlier quarter to $17.06 billion.

Analyst Ratings: Analysts seem relatively indifferent about Medco Health Solutions with 12 of 22 analysts surveyed maintaining a hold rating.

A Look Back: In the second quarter, profit fell 4% to $342.8 million (85 cents a share) from $356.9 million (77 cents a share) the year earlier, but exceeded analyst expectations. Revenue rose 4.1% to $17.07 billion from $16.41 billion.

Key Stats:

The decrease in profit in the second quarter broke a streak of three consecutive quarters of year-over-year profit increases. Net income rose 3.9% in the first quarter, 10.8% in the fourth quarter of the last fiscal year and 10.7% in the third quarter of the last fiscal year.

Revenue has risen the past four quarters. Revenue rose 4.3% in the first quarter from the year earlier, climbed 11.1% in the fourth quarter of the last fiscal year from the year-ago quarter and 10.3% in the third quarter of the last fiscal year.

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).

Stock Price Performance: During July 27, 2011 to October 20, 2011, the stock price had fallen $15.88 (-25.2%) from $63.12 to $47.24. 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, rising 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, falling 22.7% (-$14.98) over that span. Shares are down $14.03 (-22.9%) year to date.

(Source: Xignite Financials)

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