AP News, May 1st, 2007
Medco Health Solutions Inc., one of the biggest U.S. prescription-benefit managers, said Tuesday its first-quarter profit climbeed on strength in generic drugs and mail-order prescriptions. It also boosted its forecast for the year.
But the higher forecast appeared to disappoint investors as its shares sank $5.02, or 6.4 percent, to $73 in morning trading on the New York Stock Exchange. Its shares are still closer to the high end of its 52-week range of $47.08 to $80.55.
Earnings leaped to $274.8 million, or 94 cents per share, in the three months ended March 31 compared with $44.8 million, or 15 cents per share, a year earlier. The year-ago results reflected a legal settlement charge of 32 cents per share.
Adjusted earnings for the current quarter amounted to $1.03 per share excluding 9 cents per share in amortization of intangible assets that existed when Medco became a publicly-traded company.
Revenue rose 6 percent to $11.16 billion from $10.56 billion in the previous year.
The company attributed the increased sales to higher volumes associated with new clients and price inflation by pharmaceutical manufacturers on brand-name drugs, partially offset by a greater representation of lower cost generic drugs, and secondarily by previously announced customer losses.
Analysts polled by Thomson Financial were expecting earnings of 73 cents per share on revenue of $11.14 billion.
For the year, the company expects net earnings per share of $3.02 to $3.07, up from its prior range of $2.94 to $3.01. Excluding amortization, the company expects earnings of $3.40 to $3.45 per share. Analysts expected earnings of $3.37 per share for the year.
