WOONSOCKET, R.I. (AP) – CVS Health topped Wall Street’s fourth-quarter earnings expectations, as growing generic and specialty drug prescriptions fueled one the nation’s largest drugstore chains and pharmacy benefits managers.
The Woonsocket-based company also reaffirmed on Thursday its forecast for 2017 earnings of between $5.77 to $5.93 per share.
Analysts forecast, on average, earnings of $5.86 per share, according to FactSet.
CVS Health runs more than 9,700 retail locations, a total second only to Walgreens, and it processes more than a billion prescriptions annually as a pharmacy benefits manager, or PBM.
The company pulls most of its growth from the PBM side, which runs prescription drug plans for customers like insurers and employers. That segment saw revenue climb 18 percent to $31.3 billion in the fourth quarter.
A continued rise in pricey specialty drugs and growth in generic prescriptions, which are more profitable for the company, helped CVS in the quarter. But sluggish sales and a $34-million charge for some store closings hurt the company’s retail business, which saw its operating profit decrease by $53 million.
Sales from established locations slipped less than 1 percent in the quarter. That’s considered an important measure of a retailer’s financial health, because it eliminates the impact of stores that have recently opened or closed.
Overall, CVS Health saw net income climb 14 percent to $1.71 billion. Earnings, adjusted for one-time gains and costs, totaled $1.71 per share.
Analysts expected, on average, earnings of $1.67 per share on $46.48 billion in revenue, according to Zacks Investment Research.
Shares of CVS Health Corp. slid 80 cents to $76.23 in midday trading Thursday, while broader indexes climbed slightly. The company’s stock has dropped 14 percent in the last 12 months._____This story was generated in part by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on HAS at https://www.zacks.com/ap/HAS_____Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.