* Q1 EPS $0.86 vs Wall Street estimate $0.82
* Sees 2009 EPS $3.67 to $3.77
* Shares rise 2 pct after hours
(Adds analyst comment, revenue, Medco earnings)
By Bill Berkrot
NEW YORK, April 29 Express Scripts Inc (ESRX.O)
posted a better-than-expected quarterly profit on Wednesday,
helped by greater use of more profitable generic drugs, and
raised its full-year earnings forecast, boosting the pharmacy
benefit manager's shares by 2 percent.
The St Louis-based company posted a net profit of $214.4
million, or 86 cents per share, in the first quarter, up from
$177.2 million, or 69 cents per share, a year ago.
That topped analysts' average expectations by 4 cents,
according to Reuters Estimates.
Earlier on Wednesday, rival Medco Health Solutions Inc
MHS.N said its first-quarter profit and revenue rose, driven
by new business and greater generic utilization.
Medco posted a profit of 63 cents per share, excluding
items. That was 1 cent better than analysts' expectations.
Nonethless, its shares closed down $1.37, or 3.14 percent, to
end the day's trade on the New York Stock Exchange at $42.29.
Express Scripts' generic utilization rate increased to 67.7
percent from 65.1 percent in the year-ago quarter. Cheap
generic drugs have a higher profit margin for PBMs than
expensive branded medicines.
"The earnings were stronger than we expected and it's
really being driven by generic dispensing," Sanford Bernstein
analyst Helene Wolk said.
Pharmacy benefit managers, or PBM, administer prescription
drug benefits for employers and health plans and operate large
Express, which is buying Wellpoint Inc's WLP.N
prescription drug business for $4.68 billion in a deal that
will make it the second largest PBM behind Medco, said as a
result of that transaction it has suspended its share
But the company raised its full-year earnings forecast to
$3.67 to $3.77 from its prior view of $3.63 to $3.73 despite
the lack of the 7 cents to 9 cents benefit it expected to see
from fewer outstanding shares.
Express said strong underlying fundamentals will more than
offset the impact of the higher expected share count.
"The guidance looks like it's been raised by virtue of the
4-cent beat this quarter, so it's still fairly conservative,"
Wolk said. "If they continue to outpace expectations around
generic dispensing, there still might be more here."
Revenue for the quarter fell to $5.42 billion from $5.49
billion as overall sales volume was down. But that was slightly
ahead of Wall Street estimates of $5.405 billion.
Express Scripts shares rose to $61.69 in extended trading
from their $60.45 Nasdaq close.
(Reporting by Bill Berkrot; Editing by Richard Chang, Leslie