Tags: Express Scripts Analysts Estimates ‘Overly Aggressive’

Express Scripts: Analysts' Estimates ‘Overly Aggressive’

Monday, 05 Nov 2012 06:24 PM

Express Scripts Holding Co., the largest U.S. pharmacy benefits manager, said analysts’ profit estimates for 2013 are “overly aggressive” as it reported lower-than-expected revenue in the third quarter.

The shares tumbled 14 percent to $54 in late New York trading. The St. Louis-based company in a third-quarter earnings statement Monday didn’t provide specific guidance for next year, other than to say a “weak business climate and the unemployment outlook” would hurt business.

Analysts were expecting adjusted profit for 2013 of $4.50 a share, the average of 22 estimates in a Bloomberg survey.

Express Scripts said it expects conditions to lead to the loss of members, depressed drug utilization and “increased client demands and expectations.” Profits for pharmacy benefits managers are tied to clients’ drug costs as they act as middlemen between employers, health plans and the drug industry.

“It’s a tough pricing environment, and they’re anticipating a lot of their customers will go out to bid in the 2014 selling season,” said Bret Jones, an Oppenheimer & Co. analyst in New York. That’s not unusual after a merger, he said.

Express Scripts bought Medco Health Solutions Inc. for about $29 billion in April to become largest pharmacy-benefits manager in the U.S. Smaller competitors including Catamaran Corp. had reported seeing more requests for proposals from potential clients since that acquisition, Jones said.

Catamaran Contract

Catamaran said last week it won a contract to cover 180,000 Target Corp. employees starting in April. Express Scripts has Target’s business now.

The volume of adjusted prescription claims Express Scripts handled during the third quarter more than doubled to about 399 million from a year earlier. While revenue in the period also doubled to $27 billion, they fell short of analysts’ expectations for $27.5 billion, the average of 19 estimates in a Bloomberg survey.

Net income rose 21 percent to $391.4 million, or 47 cents a share, the company said. Profit excluding some items was $1.02 cents a share, exceeding the average estimate of $1.

“We have historically managed expenses rigorously while investing toward the future, focusing on innovation, service and optimal clinical outcomes, and will continue to do so, even when faced with challenges on other fronts,” Express Scripts Chief Executive Officer George Paz said in the statement.

Express Scripts shares had gained 39 percent in the past year, the seventh-best performance in the 52-member Standard and Poor’s 500 Health Care Index. The stock rose 1.4 percent Monday before announcing earnings, to $62.88.

© Copyright 2017 Bloomberg News. All rights reserved.

 
1Like our page
2Share
Companies
Express Scripts, the largest U.S. pharmacy benefits manager, said analysts' profit estimates for 2013 are "overly aggressive" as it reported lower-than-expected revenue in the third quarter.
Express Scripts Analysts Estimates ‘Overly Aggressive’
408
2012-24-05
Monday, 05 Nov 2012 06:24 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved