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Views: 262, Date:02/Aug/2016

CVS stock up on increased earnings outlook

Drug-store giant CVS Health's second-quarter profit declined, largely due to paying down debt, but Wall Street welcomed the company's increased adjusted earnings forecast.

The company posted net income of $0.9 billion, down 27.3% compared to a year earlier. Profit would have increased without a $542 million payment to extinguish debt.

CVS posted earnings-per-share of 86 cents, below S&P Global Market Intelligence analyst estimates of $1.18, which had not taken into account the effect of the debt payments.

More importantly, the company raised its full-year adjusted earnings-per-share estimate from a previous range of $5.73 to $5.89 to a new range of $5.81 to $5.89.

CVS stock jumped 0.6% to $94.02 in pre-market trading.

"I'm very pleased with our solid second quarter results across the enterprise," CVS CEO Larry Merlo said in a statement.

The nation's largest drug store chain recorded a 17.6% increase in net revenue for the quarter, compared to the same period a year earlier, to $43.7 billion. Pharmacy network claims jumped 22.6%, fueling most of the revenue uptick.

The revenue performance fell short of S&P estimates of $44.3 billion.

CVS opened 20 new drug stores, closed 10 and relocated nine during the quarter. It had 9,652 locations, including pharmacies inside Target stores, as of June 30.

Source:USA Today.com

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