ESRX Beats 1Q Earnings & Revenues Estimate

Zacks

Express Scripts Holding Company’s (ESRX) first quarter 2013 adjusted earnings of 99 cents per share beat the Zacks Consensus Estimate by a penny and increased 35.6% from the year-ago period. Higher revenues aided earnings in the first quarter of 2013.

On a reported basis (including special items), earnings declined 18.1% to 45 cents in the first quarter of 2013.

Quarter in Detail

Revenues jumped 114.8% year over year in the reported quarter to $26.0 billion, marginally beating the Zacks Consensus Estimate of $25.6 billion. The massive jump was attributable to the expanded product portfolio at Express Scripts due to the acquisition of Medco Health Solutions in 2011.

Adjusted gross profit jumped 137.0% to $2.0 billion in the reported quarter. Gross profit was boosted by the inclusion of results of the erstwhile Medco Health Solutions, which led to improved operating performance, increased generic utilization and realization of synergies.

Adjusted selling, general and administrative expenses climbed 137.4% to $541.7 million. Total adjusted claims at Express Scripts for the reported quarter came in at $390.0 million, up 102%.

Cash flow from operations came in at $963.4 million, up from $532.1 million in the first quarter of 2012.  Express Scripts repurchased 5.1 million shares for $300.0 million and repaid $1.5 billion of its long-term debt in the first quarter of 2013.

2013 Earnings Outlook Upped

Apart from announcing first quarter 2013 results, Express Scripts upped its earnings guidance for 2013. The company now expects adjusted earnings in the range of $4.23 - $4.33 per share, up 13%-16% year over year, as opposed to its earlier projected range of $4.20-$4.30 per share. The Zacks Consensus Estimate of $4.27 per share is well within the company’s projected range. The guidance was increased based on the company’s expectation of improvement in gross profit.

For the second quarter of 2013, Express Scripts expects adjusted earnings in the range of $1.08–$1.12 per share. The Zacks Consensus Estimate currently stands at $1.05.

Currently, Express Scripts carries a Zacks Rank #4 (Sell). Right now, Omnicare (OCR), Catamaran Corporation (CTRX) and MedAssets (MDAS) look better placed with a Zacks Rank #2 (Buy).
 

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