CVS Caremark reports positive Q2 results, raises outlook

WOONSOCKET, R.I. CVS Caremark announced that its net revenues for second quarter 2009 increased 17.5%, up from $21.1 billion during second quarter 2008.

The company said it earned $886.5 million, or 60 cents per share, in the three months ended June 30, up from $771.2 million, or 53 cents per share, a year ago.

Revenues in the pharmacy services segment increased 22.1% to $13 billion in the second quarter of 2009. Adjusting the growth rate for the impact of new generics, net revenues would have grown 26.2% in the pharmacy services segment. During the second quarter of 2009, the company converted a number of RxAmerica retail pharmacy network contracts, which resulted in those contracts being accounted for using the gross method which increased net revenues.

Retail network claims processed during the second quarter of 2009 increased 8.8% to 148.3 million, compared with 136.3 million in the prior-year period. This increase was primarily due to the addition of RxAmerica claims and claims that were filled at retail pharmacies under the Maintenance Choice program. This was offset by a reduction in claims due to the termination of two large health plan clients effective Jan. 1. Mail service claims processed during the second quarter of 2009 increased 5.3% to 15.8 million, compared with 15 million in the prior year period, primarily as a result of net new client starts offset by a shift of participants toward the company’s Maintenance Choice program.

Meanwhile, the retail pharmacy unit, which includes in-store pharmacies and front-store items, got a lift from a later Easter during the quarter. Sales rose 17% to $13.8 billion. CVS runs more than 6,900 drugstores in 43 states, the District of Columbia, and Puerto Rico.

Same-store sales, or sales at location open at least one year, climbed 6.1%. Same-store sales at pharmacy sections grew 7.5%, and nonpharmacy sales rose 3%.

“I’m very pleased with our second quarter results, which were at the high end of our expectations,” said Tom Ryan, CVS Caremark president and CEO. “We saw solid revenue growth and cost control across our businesses, which led to 8% operating profit growth after one-time costs for the Longs integration. This is shaping up to be a very good year and we expect an even better 2010.”