Express Scripts Profit Down, But Tops View

(RTTNews) - Pharmacy benefits manager Express Scripts Holding Co. (ESRX), Tuesday reported a smaller second-quarter profit as revenues declined, but earnings trumped analysts' estimates by a penny with revenues also surpassing expectations. Looking forward, the company tightened its 2014 earnings forecast.

St. Louis, Missouri-based Express Scripts' second-quarter profit dropped to $515.2 million from $543.0 million last year. On a per share basis, earnings improved to $0.67 per share from $0.66 per share due to lower number of shares.

Adjusted earnings were $939.4 million or $1.23 per share, compared to $940.3 million or $1.13 per share. On average, 24 analysts polled by Thomson Reuters expected earnings of $1.22 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the second quarter fell to $25.11 billion from $26.38 billion a year ago. Analysts had a consensus revenue estimate of $24.38 billion for the second quarter.

Total adjusted claims dropped to 324.5 million from 369.3 million last year. Excluding the roll-off of UnitedHealth Group claims, the decline was 5 percent.

Looking forward, the company has forecast third quarter adjusted earnings of $1.27 to $1.31 per share. Analysts currently expect earnings of $1.29 per share for the third quarter.

Express Scripts tightened its full year adjusted earnings outlook to a range of $4.84 to $4.92 per share from its prior outlook of $4.82 to $4.94 per share. The mid-point continues to be $4.88 per share. Analysts currently expect earnings of $4.86 per share for 2014.

Based on market dynamics, Express Scripts expects its retention rate for 2015 at 92 to 93 percent, resulting in expected claims volume to decline of 1.5 percent.

"We believe that in addition to our size, scale and innovation, our investment in and commitment to client and patient service positions Express Scripts well for future growth," President Tim Wentworth said.

ESRX closed Tuesday's trading at $67.28, up $1.38 or 2.09%, on the Nasdaq. The stock further gained $0.72 or 1.07%, in after-hours trade.