Express Scripts Profit Tops Estimates; Again Lifts FY Outlook

(RTTNews) - Express Scripts Holding Co. (ESRX), the largest pharmacy benefits manager, Monday reported a better-than-expected rise in second-quarter profit, on lower expenses related to its 2012 acquisition of Medco Health Solutions Inc. Nonetheless, revenues for the quarter slipped but came in ahead of expectations. Looking ahead, the company yet again lifted its expectations for the full year 2013.

"Our clinical specialization, advanced application of the behavioral sciences, and ability to leverage actionable data allow us to drive down costs, reduce waste and improve health in ways no other company can," said Chief Executive George Paz.

Express Scripts in April 2012 closed its $29-billion acquisition of Medco Health Solutions Inc. and as a result, incurred amortization charges $473 million and other costs of $380 million in its prior-year second quarter. The recent quarter include charges of $467 million.

That boosted the St. Louis, Missouri-based company's net income to $543 million or $0.66 per share from $149.6 million or $0.18 per share last year.

Excluding items, adjusted earnings for the quarter were $1.12 per share, compared with $0.87 per share a year ago. Twenty-two analysts polled by Thomson Reuters expected earnings of $1.10 per share for the current quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter slipped to $26.4 billion from $27.5 billion in the prior year. Twenty analyst had a consensus revenue estimate of $25.52 billion for the quarter.

Adjusted claims from continuing operations were down 7 percent at 369.4 million, reflecting the expected roll-off of claims from United Healthcare Group.

For the third quarter, the company expects adjusted earnings of $1.05 to $1.09 per share, while analysts expect $1.08 per share.

For the fiscal year 2013, the company now expects adjusted earnings of $4.26 to $4.34 per share, up from its prior range of $4.23 to $4.33 per share. Analysts currently expect earnings of $4.30 per share for the year.

"As expected, earnings for a large client were realized in the second quarter due to the structure of the contract. The company anticipates this pattern of earnings to continue for the foreseeable future," Express Scripts said.

Express Scripts also announced the exit of Jeff Hall as its executive vice president and chief financial officer, effective July 30. Hall will be replaced by Matthew Harper on an interim basis, who is currently vice president - financial planning and analysis. Harper joined the company in 2000 and has served in a variety of roles.

Express Scripts closed Monday at $66.93, down 1.08%, on a volume of 5 million shares on the Nasdaq. In after hours, the stock dropped $0.83 or 1.24%. In the last 52-week period, the stock trended in a range of $49.79 - $67.66.