Express Scripts 2Q net income climbs as costs fall
Posted at: 07/29/2013 5:36 PM
(AP) NEW YORK - Express Scripts says its second-quarter net income more than tripled compared to last year, when costs from the pharmacy benefits manager’s acquisition of competitor Medco Health Solutions dented its performance.
The results topped Wall Street estimates but shares edged lower in after-hours trading.
The St. Louis company said Monday that it earned $543 million, or 66 cents per share, in the quarter ended June 30. That compares to $149.6 million, or 18 cents per share, a year ago.
Express Scripts said it earned $1.12 per share if one-time items are excluded.
Revenue fell 4 percent to $26.43 billion.
Analysts surveyed by FactSet expected earnings of $1.10 per share on $25.50 billion in revenue.
Express Scripts Holding Co. is the nation’s largest pharmacy benefits manager. It runs prescription drug plans for employers, insurers and other customers. Express Scripts other PBMs process mail-order prescriptions and handle bills for prescriptions filled at retail pharmacies. They use large purchasing power to negotiate lower drug prices and make money by reducing costs for health plan sponsors and members.
The company said prescriptions fell 7 percent after it lost a contract with UnitedHealth Group Inc., the largest U.S. health insurer. Express Scripts said it handled 369.4 million adjusted claims from continuing operations during the quarter.
Adjusted prescriptions count 90-day mail order prescriptions as three one-month prescriptions.
The company said it is looking for a new chief financial officer and current CFO Jeff Hall’s last day on the job will be Tuesday. It said Matthew Harper will be its interim CFO. Harper has been with the company since 2004 and became its vice president in charge of financial planning and analysis in April.
Hall has been Express Scripts’ CFO since 2008, and the company said he will serve in a different role through Sept. 1 as part of its transition plan.
Express Scripts closed its $29.1 billion acquisition of Medco at the start of last year’s second quarter. The deal created a company big enough to handle the prescriptions of more than one in three Americans. Express Scripts has seen its revenue and prescription counts swell since the deal closed.
Express Scripts raised its full-year guidance to a range of $4.26 to $4.34 per share, up from its previous estimate of $4.23 to $4.33 per share. Analysts expect $4.29 per share on average.
Express Scripts said it should earn between $1.05 and $1.09 per share in the third quarter. Analysts expect $1.08 per share.
Shares of Express Scripts lost 73 cents to $66.93 in regular trading on Monday. The shares have climbed 23.9 percent in 2012. In aftermarket trading the stock slipped another 13 cents to $66.80.
Express Scripts will hold a Tuesday morning conference call to discuss the results with analysts. Company executives also plan to share their thoughts on growth drivers for the industry and Express Scripts growth potential. The company typically releases its results after markets close and then hosts a call the next morning to go over them.
Express Scripts executives have said unemployment rates, low health care use and increased client demands and expectations all could influence its performance this year.
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