CVS Caremark says 4Q profit grew 17 percent

NEW YORK -- CVS Caremark Corp. said Thursday its profit rose 17 percent in the fourth quarter because of improved results for its drugstores.

The Woonsocket, R.I. based-drugstore chain and pharmacy benefits manager with an office facility in Northbrook said it earned $949.3 million, or 65 cents per share, up from $811.2 million, or 55 cents per share, a year ago. Excluding items, profit grew to 70 cents per share from 58 cents per share. Revenue rose 10 percent, to $24.14 billion from $21.94 billion.

Thomson Reuters said analysts expected 69 cents per share and $23.29 billion in revenue.

CVS's drugstore revenue grew 19 percent to $13.83 billion. Same-store sales, or sales at locations open at least one year, grew 3.6 percent for the quarter, including a significant slowdown in December. Pharmacy same-store sales rose 4.5 percent in the fourth quarter, and front-end sales increased 1.8 percent.

CVS had 6,923 retail pharmacies at the end of the quarter. That includes the addition of 529 Longs Drugs stores, as CVS closed its buyout of the California-based chain during the quarter. The company opened 52 new retail pharmacies, relocated seven and closed six.

It also has 58 specialty pharmacies, 19 specialty mail order pharmacies and seven mail order pharmacies.

Pharmacy services revenue edged up 2 percent to $11.78 billion, as the volume of retail network claims grew 18 percent to 160.3 million. Mail service claims dropped 15 percent to 15.9 million, mostly because CVS lost a contract to fill mail order prescription for the Federal Employees Health Benefit Plan at the end of 2007.

The results are not adjusted to reflect that the fourth quarter of 2008 was three days longer than the fourth quarter of 2007 because CVS chose to report its results on a calendar year basis. The year-earlier period ended on Dec. 29.

CVS Caremark said its adjusted profit from continuing operations rose 26 percent for the year, to $3.59 billion, or $2.44 per share, from $2.84 billion, or $2.07 per share. Revenue grew 15 percent, to $87.47 billion from $76.33 billion.

Drugstore revenue increased 9 percent, to $48.99 billion, and Caremark revenue rose 25 percent to $43.8 billion in 2008.

In January, CVS Chief Executive Tom Ryan said the company expects to earn $2.53 to $2.61 per share in profit in 2008, including a charge of 6 to 7 cents per share related to the Longs buyout. Analysts expect $2.58 per share.