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Post Earnings Coverage as Express Scripts' Adjusted EPS Gained 21%; Adjusted EBITDA per Adjusted Claim up 14%

Upcoming AWS Coverage on CVS Health Post-Earnings Results

LONDON, UK / ACCESSWIRE / February 22, 2017 / Active Wall St. announces its post-earnings coverage on Express Scripts Holding Co. (NASDAQ: ESRX). The Company released its fourth quarter and fiscal 2016 financial results on February 14, 2017. The US largest pharmacy benefits manager surpassed earnings expectations. Register with us now for your free membership at:


One of Express Scripts Holding's competitors within the Health Care Plans space, CVS Health Corp. (NYSE: CVS), reported its Q4 and full year results for 2016 on February 09, 2017. AWS will be initiating a research report on CVS Health in the coming days.

Today, AWS is promoting its earnings coverage on ESRX; touching on CVS. Get our free coverage by signing up to:


Earnings Reviewed

For the three months ended December 31, 2016, Express Scripts reported revenue of $24.86 billion, down 5% compared to revenue of $26.18 billion in Q4 2015. Analysts were expecting revenue of $26.31 billion. For FY16, for the full year, Express Scripts generated revenues of $100.3 billion compared to the year ago figure of $101.7 billion.

For Q4 2016, Express Scripts reported earnings of $1.43 billion, or $2.34 a share, up from $773.5 million, or $1.13 per share, in the year ago same period. During the reported quarter, the Company's GAAP earnings per diluted share grew 107%, largely due to the strong performance of its core PBM business and the Liberty tax benefit of $511 million.

Excluding certain items, Express Scripts reported earnings of $1.88 per share in Q4 2016, up 21% from $1.56 per share in Q4 2015, above the high end of the Company's guidance of $1.84 to $1.90 per share, and exceeded analysts' consensus by a penny.

During Q4 2016, Express Scripts adjudicated 354.9 million adjusted claims, generating adjusted EBITDA of $2.1 billion, up 6%, which resulted in adjusted EBITDA per adjusted claim of $5.79, or growth of 14% on a y-o-y basis. Adjusted SG&A ramped down in the fourth quarter and decreased by 23% versus the fourth quarter of 2015. This was a result of reduced annual incentive compensation in both the third and fourth quarters due to the reduction in our 2016 EBITDA guidance in the third quarter.

For FY16, Express Scripts reported GAAP net income of $3.40 billion, up 37% and GAAP earnings per diluted share of $5.39, up 51% on a y-o-y basis. The Company generated $6.39 of adjusted earnings per diluted share, which represents another year of double-digit growth at 16%. The Company's adjusted claims for the year were 1.4 billion, down 2% on a y-o-y basis. Excluding the impact of Coventry rolling off its books, its volume growth was up 2.8% for the year. Express Scripts delivered adjusted EBITDA of $7.3 billion and adjudicated over $1.4 billion total adjusted claims, resulting in an adjusted EBITDA per adjusted claim of $5.16, or growth of 6%.

Cash Flow Details

For Q4 2016, Express Scripts' net cash flow provided by operating activities was $2.25 billion, down 22% on a y-o-y basis. For FY16, the Company's net cash flow from operations was $4.92 billion up 1%. The Company deployed $10.6 billion of cash during FY16, $4.7 billion to repurchase common stock via an accelerated share repurchase agreement and open market purchases, and $5.9 billion to retire debt.

In October 2016, Express Scripts recognized a previously disclosed net tax benefit of approximately $511.0 million, or $0.81 per diluted share, related to the disposition of PolyMedica Corporation (Liberty). Following receipt of the tax benefit proceeds, the Board of Directors authorized the use of $41.2 million, approximately 8%, or $0.04 per share net of tax, of the PolyMedica tax benefit proceeds to reward employees for the significant contribution this multi-year effort provided the Company and its shareholders.

2017 Guidance

Express Scripts reaffirmed its FY17 adjusted earnings per diluted share guidance in the range of $6.82 to $7.02, which represents growth of 8% over FY16 adjusted earnings per diluted share results at the mid-point of the range. The Company expects total adjusted claims for Q1 2017 to be in the range of 345 million to 355 million. Adjusted earnings per diluted share for Q1 2017 are estimated to be in the range of $1.30 to $1.34, which represents growth of 7% to 10% on a y-o-y basis.

Stock Performance

At the close of trading session on Tuesday, February 21, 2017, Express Scripts Holding's stock price rose 2.00% to end the day at $71.37. A total volume of 4.55 million shares were exchanged during the session, which was above the 3-month average volume of 4.09 million shares. The Company's share price has gained 3.51% in the past twelve months. The stock is trading at a PE ratio of 13.13 and currently has a market cap of $43.54 billion.

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SOURCE: Active Wall Street