Express Scripts quarterly net profit rises, shares dip

Thu Oct 24, 2013 6:55pm EDT

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(Reuters) - Pharmacy benefit manager Express Scripts Holding Co (ESRX.O) on Thursday reported higher net earnings for the third quarter but said claims volume declined 9 percent.

The company's shares, which closed at $63.74 on the Nasdaq, were down 4.3 percent at $60.99 in after-hours trading.

"They had a pretty good quarter ... results were in line," said Morningstar analyst Vishnu Lekra. He said some investors may have been disappointed with the drop in claims but that the decline was expected after one of the company's larger health insurer clients decided to take its business in-house.

Express Scripts and other pharmacy benefit managers administer prescription drug benefits for employers and health plans, and also run large mail order pharmacies.

The company said it expects fourth-quarter adjusted earnings of $1.09 to $1.13 per share, the mid-point of which is below Wall Street's estimate of $1.12 a share, according to ISI Group, which called the third-quarter results "lackluster."

Excluding items such as a tax benefit of 1 cent per share, Express Scripts earned $1.07 a share in the third quarter, just below the $1.08 a share expected on average by analysts, according to Thomson Reuters I/B/E/S.

The company reported net earnings of $438.1 million, or 52 cents a share, compared with $395.9 million, or 47 cents a share, a year earlier.

Revenue totaled $25.9 billion, just ahead of the average estimate of $25 billion.

Citing its year-to-date performance and reduced tax rate, Express Scripts raised the lower end of its full-year profit outlook. It now expects adjusted 2013 earnings of $4.30 to $4.34 per share, up from its prior outlook of $4.26 to $4.34 per share.

(Reporting by Deena Beasley; Editing by Eric Walsh and Steve Orlofsky)

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