CVS Jumps After Forecasting Profit That Tops Estimates
CVS Caremark Corp. (CVS), the largest provider of prescription drugs in the U.S., jumped the most in three months after forecasting 2013 profit that topped analysts’ estimates, helped by new pharmacy customers.
Adjusted profit next year will be $3.84 a share to $3.98 a share, Woonsocket, Rhode Island-based CVS said today in a statement. The average estimate of 21 analysts in a Bloomberg survey was $3.81.
Chief Executive Officer Larry Merlo has increased marketing and promotions to retain customers that it won when Walgreen Co. (WAG) ended a contract to provide Express Scripts Holding Co. (ESRX) shoppers with prescriptions. While Walgreen and Express Scripts have renewed the agreement, CVS said last month it expects to keep at least 60 percent of the customers it gained from the dispute.
The company also today raised its quarterly dividend 38 percent to 22.5 cents a share. The first payout at the new level will be payable Feb. 4 to shareholders of record as of Jan. 24. The company plans to complete $4 billion in share repurchases next year.
CVS last month said third-quarter net income rose 16 percent to $1.01 billion, or 79 cents a share. Profit excluding some items was 85 cents a share, topping analysts’ average estimate of 84 cents.
Retail pharmacy same-store sales increased 4.3 percent in the quarter, helped by a “significant” benefit from former Walgreen customers, CVS said.
Adjusted profit this year will be as much as $3.41 a share, CVS said last month.
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