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Acquisition boosts Express Scripts profit 39 pct.
Monday - 4/29/2013, 5:28pm EDT
The Associated Press
ST. LOUIS (AP) -- Express Scripts said Monday its first-quarter earnings jumped 39 percent compared to last year, when charges tied to its acquisition of competitor Medco Health Solutions hurt the pharmacy benefit manager's performance.
The acquisition more than doubled Express Scripts' revenue in the quarter, more than offsetting higher operating costs for the combined company, which is now the largest U.S. pharmacy benefit manager in the country. The company raised its full-year earnings guidance, and shares rose in extended trading.
The St. Louis company earned $373 million, or 45 cents per share, in the quarter, up from $267.8 million, or 55 cents per share, a year earlier. The company's outstanding shares ballooned after the Medco acquisition, pushing down per-share results.
Excluding one-time charges connected with the acquisition, the company would have earned 99 cents per share.
Revenue more than doubled to $26.1 billion, from $12.1 billion.
Analysts polled by FactSet expected adjusted earnings of 97 cents per share on $25.45 billion in revenue.
The company raised its 2013 profit guidance by 3 cents, to $4.23 to $4.33 per share, from $4.23 to $4.33. Analysts expect $4.26 per share, on average.
The company's $29.1 billion acquisition of Medco last April made it big enough to handle the prescriptions of more than one in three Americans. Revenue and prescription counts have swelled. In the most recent quarter, the number of claims it handled more than doubled to almost 390 million, an increase of 102 percent. The measure counts 90-day mail order prescriptions as three one-month prescriptions
Pharmacy benefit managers, or PBMs, run prescription drug plans for employers, insurers and other customers. They process mail-order prescriptions and handle bills for prescriptions filled at retail pharmacies. They also negotiate lower drug prices and make money by reducing costs for health plan sponsors and members.
The company said more people used generic drugs in the first quarter, boosting profitability. Generics help pharmacy benefit managers' bottom lines because there's a wider margin between the cost for the pharmacy to purchase the drugs and the reimbursement received.
Chairman and CEO George Paz said streamlined operations between the two combined companies also boosted performance.
"As we mark the one-year anniversary of the Medco transaction, our company today is better than the sum of its parts," Paz said in a release.
Shares of Express Scripts Holding Company rose $1.11 to $59.55 in after-hours trading. Shares closed regular trading at $58.44.
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