Express Scripts Prescriptions Fall, Earnings Match Estimates

  • Adjusted earnings of $1.57 a share in line with estimates
  • Prescriptions more profitable even as volume declines

Express Scripts Holding Co. reported second-quarter profit that matched analysts’ estimates as the number of prescriptions the pharmacy benefit manager processed fell.

Profit excluding one-time items was $1.57 a share, the St. Louis-based company said Monday in a statement, equaling the average of analysts’ estimates compiled by Bloomberg. Adjusted prescription claims decreased 1.8 percent to 315.3 million. Revenue fell 0.9 percent to $25.2 billion, below the average estimate of $25.4 billion.

Express Scripts shares have slumped 11 percent this year as of Monday’s close, amid a continuing dispute over pricing with its biggest customer, health insurer Anthem Inc. The company offered no new details on the Anthem dispute in its earnings release.

The shares rose less than 1 percent to $77.94 after the market closed in New York, after closing down 1.9 percent at $77.39.

Anthem says it’s being overcharged by Express Scripts by billions of dollars a year, and in a lawsuit filed in March asked for the option to end their relationship. In a countersuit filed in April, Express Scripts said it doesn’t owe Anthem any price reductions under their current contract, which runs through 2019, and accused it of failing to negotiate in good faith.

Employers, insurers and other customers pay Express Scripts to keep the cost of drugs in check by switching patients to generic versions of medicines, and by pitting manufacturers of brand drugs against each other to get on the company’s list of covered treatments.

The average profit on each prescription processed rose from a year earlier, with Ebitda per adjusted claim rising 2 percent to $5.70 from a year earlier. Ebitda refers to earnings before interest, taxes, depreciation and amortization. Second-quarter net income attributable to Express Scripts rose to $720.7 million, or $1.13 a share, from $600.1 million, or 88 cents, a year earlier.

More from the company statement:

  • Express Scripts raised the low end of its 2016 adjusted earnings forecast, and now projects earnings of $6.33 to $6.43 a share, up from $6.31 to $6.43 a share.
  • The company projected third-quarter adjusted earnings per share of $1.72 to $1.76 a share.
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