Q4 profits amplified for CVS Caremark
WOONSOCKET, R.I. CVS Caremark announced on Monday that fourth-quarter PBM revenues experienced double-digit gains as its retail business posted a 4.9% boost in same-store sales.
Net revenues for the fourth quarter ended Dec. 31 increased $1.7 billion to $25.8 billion. For fiscal year 2009, total revenues rose 12.9% to a record $98.7 billion, compared with $87.5 billion in the year-ago period.
Revenues in the PBM segment increased 14.5% to $13.5 billion during the fourth quarter. Adjusting for the impact of new generics, net revenues would have grown 18.3% in the pharmacy services segment. Pharmacy network claims processing during the quarter decreased 5.6% primarily due to the termination of two large health plan clients effective Jan. 1, 2009, and having three fewer reporting days in the fourth quarter 2009 compared with the fourth quarter 2008. This, however, was partially offset by new client starts and the addition of RxAmerica claims for the full quarter 2009 versus a partial quarter in 2008. Mail choice claims processed during the quarter rose 4.4% to $16.7 million largely due to net new client starts.
For the fiscal year 2009, total revenues in the pharmacy services segment increased 16.7% to $51.1 billion.
On the retail side of the business, revenues during the fourth quarter increased 4.5% to $14.5 billion. Same-store sales increased 4.9% as pharmacy same-store sales rose 7.3%. Pharmacy same-store sales during the quarter were positively impacted by about 270 basis points due to the company's Maintenance Choice program. Maintenance Choice allows consumers to purchase chronic 90-day prescriptions at CVS stores for the same price as at mail.
Meanwhile, front-end same-store sales increased 0.3% during the quarter.
For the fiscal year 2009, total revenues in the retail segment rose 13% to $55.4 billion.
Income from continuing operations during the quarter increased 10.2% to $1.1 billion as adjusted earnings per share from continuing operations were 79 cents compared with 70 cents in the year-ago period.
Meanwhile, income from continuing operations for the fiscal year rose 10.9% to $3.7 billion as adjusted earnings per share from continuing operations were $2.74, compared with $2.44 in the year-ago period.
"We made good progress in 2009, solidifying our position as the largest pharmacy health care provider in the nation with the broadest capabilities. We continued to make investments and forge strategic alliances that will enable us to capitalize on the evolving health care landscape and further differentiate our offerings in the marketplace. At the same time, we delivered financial performance ahead of our initial plan for the year, including the solid quarter we announced today," stated Tom Ryan, chairman, president and CEO. "I'm very pleased to report continued industry-leading performance in our retail pharmacy business and solid performance in our PBM, which resulted in double-digit EPS growth and significant free cash flow generation."