CVS Health Corp., the biggest U.S. retailer of prescription drugs, beat analysts’ estimates as revenue in its pharmacy management business rose 18 percent.
Excluding one-time items, first-quarter earnings were $1.14 a share, compared with analysts’ average estimate of $1.08. Sales rose 11 percent to $36.3 billion, the company said Friday in a statement. Analysts had predicted $35.9 billion.
CVS is the nation’s second-largest pharmacy benefits manager, handling drug plans for health insurers and employers. The business, which reported $23.9 billion in sales, has given the company a faster source of growth than its retail division, where sales increased 2.9 percent to $17 billion.
CVS narrowed its 2015 adjusted earnings projection to $5.08 to $5.19 a share, from a range of $5.05 to $5.19.
Shares of CVS rose less than 1 percent to $100.04 at 9:52 a.m. in New York. Through Thursday, the shares had climbed 37 percent in the past year.
The pharmacy benefit management market is growing more competitive. In March, UnitedHealth Group Inc. agreed to buy Catamaran Corp. in a $12.8 billion deal that will create a large third-place competitor. And in February, drugstore chain Rite Aid Corp. agreed to buy pharmacy benefits manager EnvisionRx for about $2 billion. Express Scripts Holding Co. is the industry leader.
The landscape for retail drugstores has been changing as competition from online retailers presents new challenges. Rite-Aid remodeled 115 stores in its fourth quarter while rival Walgreens Boots Alliance Inc. said in April that it was closing 200 of its about 8,000 U.S. drugstores to cut costs.
CVS has been making changes of its own, and last year stopped selling cigarettes. The Woonsocket, Rhode Island-based company previously generated $2 billion in annual tobacco sales.
Net income rose to $1.22 billion, or $1.07 a share, from $1.13 billion, or 95 cents, a year earlier.