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  • wall_st_knight_mare wall_st_knight_mare Feb 6, 2013 9:31 AM Flag

    CVS Caremark profit up on gains in both divisions

    Feb 6 (Reuters) - CVS Caremark Corp posted a bigger-than-anticipated rise in fourth-quarter profit on Wednesday, helped by growth at both its pharmacy services business and its CVS drugstore chain.

    The company also raised its 2013 profit forecast by 2 cents per share due to a debt tender and refinancing executed at the end of 2012.

    CVS Caremark was formed when drugstore chain CVS bought the Caremark pharmacy benefits management business in 2007 in a $27 billion stock deal. The company faced scorn from some industry watchers years ago for its combined model of running drugstores and a PBM.

    Lately, it has been putting more pressure on rivals that operate in a limited part of the sector, such as Express Scripts Holding Co and Walgreen Co.

    CVS earned $1.13 billion, or 90 cents per share, up from $1.06 billion, or 81 cents per share, a year earlier.

    Excluding certain items, the profit of $1.14 per share topped the analysts' average forecast of $1.10, according to Thomson Reuters I/B/E/S.

    About 3 cents per share of the profit stemmed from a lower effective tax rate and from having fewer shares outstanding than originally anticipated, Chief Executive Officer Larry Merlo said in a statement.

    Revenue rose 10.9 percent to $31.39 billion.

    Revenue in the PBM unit, which administers drug benefits for employers and health plans and runs a large mail order pharmacy, rose 17.4 percent to $18.64 billion.

    Revenue in the retail division rose 5.1 percent to $16.28 billion, with sales at drugstores open at least a year up 4 percent.

    CVS said it expects earnings per share of $3.86 to $4.00 this year before special items, up from its December forecast of $3.84 to $3.98. The analysts' current forecast is $3.94.

    The company still expects to earn 77 cents to 80 cents per share before items in the current first quarter, matching the forecast it gave in December. Analysts are looking for a profit of 79 cents per share.

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