Advertisement
News
Advertisement

CVS Caremark Reports Record Fourth Quarter And Full Year 2012 Results

Wed, 02/06/2013 - 8:35am

 

CVS Caremark Corporation today announced operating results for the three months and year ended December 31, 2012.

Fourth Quarter Year-over-year Highlights:

 

 -- Net revenues increased 10.9% to a record $31.4 billion, with Pharmacy Services up 17.4% and Retail Pharmacy up 5.1%

 

 -- Retail Pharmacy segment same store sales increased 4.0%

 

 -- Operating profit increased 17.7% to a record $2.3 billion

 

 -- Adjusted EPS of $0.97 and GAAP diluted EPS from continuing operations of $0.90, both of which include a $0.17 per share loss on early extinguishment of debt

 

 -- Adjusted EPS of $1.14, excluding the loss on early extinguishment of debt

 

Full Year Highlights:

 

 -- Net revenues increased 15.0% to a record $123.1 billion, with Pharmacy Services up 24.7% and Retail Pharmacy up 6.8%

 

 -- Retail Pharmacy segment same store sales increased 5.5% -- Operating profit increased 14.2% to a record $7.2 billion

 

 -- Adjusted EPS of $3.7 and GAAP diluted EPS from continuing operations of $3.03, both of which include a $0.17 per share loss on early extinguishment of debt

 

 -- Adjusted EPS of $3.43, excluding the loss on early extinguishment of debt -- Generated free cash flow of $5.2 billion; cash flow from operations of $6.7 billion

 

2013 Guidance:

 

 -- Raised full year Adjusted EPS to $3.86 to $4.00; GAAP diluted EPS from continuing operations of $3.61 to $3.75, to reflect the impact of debt refinancing

 

 -- Confirmed first quarter Adjusted EPS from continuing operations of $0.77 to $0.80; GAAP diluted EPS from continuing operations of $0.71 to $0.74

 

 -- Confirmed full year free cash flow of $4.8 to $5.1 billion; cash flow from operations of $6.4 to $6.6 billion Revenues Net revenues for the three months ended December 31, 2012, increased 10.9%, or $3.1 billion, to $31.4 billion, up from $28.3 billion in the three months ended December 31, 2011. For the year ended December 31, 2012, total revenue increased 15.0%, or $16.0 billion, to $123.1 billion, compared to $107.1 billion for the year ended December 31, 2011.
Revenues in the Pharmacy Services segment increased 17.4% to $18.6 billion in the three months ended December 31, 2012. This increase was primarily associated with new 2012 client starts, drug cost inflation and the growth of our Medicare Part D program. Pharmacy network claims processed during the three months ended December 31, 2012, increased 6.5% to 205.5 million, compared to 193.0 million in the prior year period. The increase in pharmacy network claims was primarily due to a large number of 2012 new client starts, as well as higher claims activity associated with our Medicare Part D program. Mail choice claims processed during the three months ended December 31, 2012, increased approximately 14.6% to 20.4 million compared to 17.8 million in the prior year period. The increase in the mail choice claim volume was primarily due to a significant number of 2012 new client starts, as well as increased claims associated with the continuing client adoption of our Maintenance Choice offerings. For the year ended December 31, 2012, total revenue in the Pharmacy Services segment increased 24.7% to $73.4 billion, compared to $58.9 billion in the year ended December 31, 2011.
Revenues in the Retail Pharmacy segment increased 5.1% to $16.3 billion in the three months ended December 31, 2012. Same store sales increased 4.0% over the prior year period, with pharmacy same store sales up 4.0% and front store same store sales up 3.9%. Calendar day shifts in the fourth quarter of 2012, which had one additional Monday and one fewer Saturday compared with the same period in 2011, positively impacted pharmacy same store sales by approximately 80 basis points. Additionally, pharmacy same store prescription volumes rose 9.0% when 90-day prescriptions are counted as one prescription.
After converting each 90-day prescription into three prescriptions, same store prescription volumes increased 11.0% in the quarter.
Pharmacy same store sales were negatively impacted by approximately 11 percentage points due to recent generic introductions. For the year ended December 31, 2012, total revenue in the Retail Pharmacy segment increased 6.8% to $63.7 billion, compared to $59.6 billion in the year ended December 31, 2011. Same store sales increased 5.5% for the year ended December 31, 2012, over the prior year, with pharmacy same store sales up 6.5% and front store same store sales up 3.4%.
For the three months ended December 31, 2012, the generic dispensing rate increased approximately 500 basis points to 80.0% in our Pharmacy Services segment and approximately 400 basis points to 79.9% in our Retail Pharmacy segment, compared to the prior year period.
Income from Continuing Operations Attributable to CVS Caremark Income from continuing operations attributable to CVS Caremark for the three months ended December 31, 2012, increased 2.7%, or $29 million, to $1.13 billion, compared with $1.10 billion during the three months ended December 31, 2011. The increase in income from continuing operations was primarily driven by improved operating profit in both our Pharmacy Services and Retail Pharmacy segments. Adjusted earnings per share from continuing operations attributable to CVS Caremark (Adjusted EPS) for the three months ended December 31, 2012 and 2011, was $0.97 and $0.89, respectively. These include a $348 million, or an approximate $0.17 per share, loss on early extinguishment of debt recognized in the fourth quarter of 2012. Excluding the loss on early extinguishment of debt, Adjusted EPS increased 27.9% in the fourth quarter to $1.14. Adjusted EPS excludes $124 million and $114 million of intangible asset amortization related to acquisition activity in the three months ended December 31, 2012 and 2011, respectively. GAAP earnings per diluted share from continuing operations attributable to CVS Caremark for the three months ended December 31, 2012 and 2011, was $0.90 and $0.84, respectively, which also includes the impact of the loss on early extinguishment of debt recognized in the fourth quarter of 2012.
Income from continuing operations attributable to CVS Caremark for the year ended December 31, 2012, increased 11.3%, or $392 million, to $3.9 billion, compared to $3.5 billion in the prior year. Adjusted EPS, which excludes $486 million and $452 million of intangible asset amortization related to acquisition activity for the years ended December 31, 2012 and 2011, was $3.7 and $2.80, respectively. These include the $348 million, or the approximate $0.17 per share, loss on early extinguishment of debt recognized in the fourth quarter of 2012.
Excluding the loss on early extinguishment of debt, Adjusted EPS increased 22.8% in 2012 to $3.43. GAAP earnings per diluted share from continuing operations attributable to CVS Caremark for the year ended December 31, 2012, was $3.03, which also includes the impact of the loss on early extinguishment of debt, compared to $2.59 in the prior year.
President and Chief Executive Officer Larry Merlo, said, "I'm very pleased with our fourth quarter results. Both the PBM and retail segments turned in strong performances at the high end of our expectations. And we also realized below-the-line benefits in the quarter from a lower effective tax rate and fewer shares than we originally anticipated, resulting in EPS exceeding the high end of our guidance by approximately three cents per share." Mr. Merlo continued, "Additionally, we continued to drive shareholder value through our disciplined approach to capital allocation.  We generated free cash flow of $5.
 billion in 2012, exceeding our expectations, and returned more than $5.1 billion to our shareholders through dividends and share repurchases." Real Estate Program During the three months ended December 31, 2012, the company opened 37 new retail drugstores and closed two retail drugstores. In addition, the company relocated eight retail drugstores. As of December 31, 2012, the company operated 7,525 locations in 45 states, the District of Columbia and Puerto Rico. These locations included 7,458 retail drugstores, 19 onsite pharmacies, 31 retail specialty pharmacy stores, 12 specialty mail order pharmacies and five mail order pharmacies.
Guidance The company raised its earnings guidance for the full year 2013 to reflect the anticipated two cents per share of EPS accretion related to the debt tender and refinancing that was executed during the fourth quarter of last year. The company currently expects to deliver Adjusted EPS of $3.86 to $4.00 and GAAP diluted earnings per share from continuing operations of $3.61 to $3.75 per share in 2013. The company confirmed its 2013 free cash flow guidance of $4.8 billion to $5.1 billion, and its 2013 cash flow from operations guidance of $6.4 billion to $6.6 billion. These 2013 guidance estimates assume the completion of $4.0 billion in share repurchases.
 

 

Topics

Advertisement
Advertisement

Share this Story

X
You may login with either your assigned username or your e-mail address.
The password field is case sensitive.
Loading