By Matt Andrejczak
SAN FRANCISCO (Dow Jones) - CVS Caremark Corp. reported Tuesday
first-quarter net income edged down, clipped by new
pharmacy-contract costs and acquisition integration expenses.
But the nation's largest drug-store chain boosted its full-year
profit outlook by two cents a share, citing the performance of the
newly acquired Long Drug stores.
CVS said first-quarter profit declined to $738.4 million, or 50
cents a share, from $745 million, or 51 cents a share, a year
earlier. Revenue rose 10% to $23.4 billion.
The company said it would have earned 55 cents a share,
excluding $107.5 million of intangible asset amortization related
to acquisition activity. Analysts estimated the company to earn 53
cents a share, according to FactSet Research.
CVS shares rose 0.7% to $32.25 by late morning trading.
Earlier this year, CVS renegotiated some pharmacy contracts at
lower price rates and bid aggressively to keep others. The drug
retailer told investors this would undercut its profit margin this
year but the new deals would help business in 2010.
Rhode Island-based CVS (CVS) operates 6,900 stores across the
nation and fills the most drug prescriptions nationwide. It
acquired Longs Drug Stores last fall, adding 529 stores in
California, Arizona, Hawaii and Nevada.
CVS said sales at stores open more than one year - a key gauge
of retailer health - rose 3.3% over the same quarter last year.
Pharmacy same-store sales rose 4.6% and front-end cash register
sales gained 0.7%.
CVS said retail pharmacy network claims processed rose 4.4% to
147.7 million helped by the addition of RxAmerica members and the
Maintenance Choice program. Mail service claims rose 3% to 15.7
million during the quarter.
Looking forward, the drug retailer forecast 2009 profit,
excluding charges, between $2.55 and $2.63 a share. Its previous
forecast had been $2.53 to $2.61 a share.
CVS shares have gained 12% so far this year.
