CVS profit tops estimates even as retail growth slows

(Updated 9:55 a.m.)
WOONSOCKET – CVS Health Corp. beat analysts’ second-quarter earnings expectations even as retail sales growth slowed.

Sales rose 7.4 percent to $37.2 billion, the company said in a statement. That was in line with analysts’ estimates.

Profit was $1.3 billion, or $1.12 per diluted share, in the second quarter, compared with profit of $1.2 billion, or $1.06 per diluted share during the prior-year quarter.

Profit excluding one-time items was $1.22 a share, 2 cents above the average of analyst estimates compiled by Bloomberg. Profit excluding one-time items was $1.3 billion.

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The company also narrowed its full-year adjusted earnings forecast to $5.11 to $5.18 a share from a previous forecast of $5.08 to $5.19 a share. Analysts had projected $5.17 a share.

CVS, the largest provider of prescription drugs in the United States, is expanding beyond its retail roots with two second-quarter acquisitions. They’re part of a record year for the health care industry, with consolidation affecting insurers and drugmakers.

In May, CVS agreed to purchase nursing-home pharmacy Omnicare for $12.7 billion, expanding services to the country’s elderly. Less than four weeks later, CVS struck a deal to acquire Target Corp.’s pharmacies and clinics for $1.9 billion, putting its brand, which includes MinuteClinics, in retail locations across 47 states.

Pharmacy services revenue rose 12 percent in the second quarter to $24.4 billion, the company said.

Front-of-store sales for locations that have been open at least a year dropped 7.8 percent, reflecting the company’s decision to stop selling tobacco products.

CVS shares fell less than 1 percent to $112 in early trading. The shares had gained 48 percent in the 12 months through Monday.

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