Express Scripts Profit Up, But Revenue Falls; Stock Down

(RTTNews) - Pharmacy benefits manager Express Scripts (ESRX), Thursday reported a higher third-quarter profit, due mainly to a decrease in acquisition costs and interest expenses, even as revenue slipped. While third-quarter earnings were in line with Wall Street estimates, revenue came in ahead of expectations.

The company lifted the lower end of its earnings guidance for 2013, citing performance and reduced tax rate. Nonetheless, investors were not overly impressed with Express Scripts' quarterly results, sending its shares down 4 percent in after-hours trade on the Nasdaq.

"We continue to be positive on the long-term outlook for our industry and our company," said CEO George Paz. "As the healthcare landscape continues to evolve, we are well-positioned to help clients and members successfully navigate a rapidly-changing environment full of new rules and regulations."

Express Scripts serves millions of Medicare beneficiaries, and offers healthcare management and administration services on behalf of its clients.

Meanwhile, the company said results for the third quarter were helped by a drop in amortization charges related to its $29 billion acquisition of Medco Health Solutions Inc. in April 2012.

The company incurred such charges of $287.5 million net of tax for the quarter, compared with $301.7 million net of tax last year. Interest expense declined to $95.4 million from $148.7 million a year ago.

The St. Louis, Missouri-based company's net income grew to $426.7 million or $0.52 per share from $391.4 million or $0.47 per share last year.

Excluding items, adjusted earnings for the quarter were $1.08 per share, compared with $1.03 per share a year ago.

On average, 21 analysts polled by Thomson Reuters expected earnings of $1.08 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the quarter dropped to $25.92 billion from $26.76 billion in the prior year. Nineteen analysts had a consensus revenue estimate of $25.01 billion for the quarter.

Adjusted claims from continuing operations were lower at 358.1 million, compared with 393.7 million last year.

During the quarter, Express Scripts repurchased 11.6 million shares of its common stock for $751.5 million, leaving 51.3 million shares available under the current repurchase program.

For the fourth quarter, the company expect adjusted earnings in the range of $1.09 to $1.13 per share, while analysts expect a profit of $1.12 per share.

For fiscal year 2013, the company now expect adjusted earnings in the range of $4.30 to $4.34 per share, from a prior range of $4.26 to $4.34 per share. Analysts currently expect earnings of $4.31 per share for the year.

The company's stock closed Thursday at $63.74, down $0.11 or 0.17%, on a volume of 5.3 million shares on the Nasdaq. In after hours, the stock dropped $2.68 or 4.20%, trading at $61.06. In the last 52-week period, the stock trended in the range of $49.79 - $67.66.