* Second-qtr adj earnings $1.12 vs est $1.10
* Raises 2013 earnings forecast for second time
* Co says CFO to leave, appoints interim finance chief
July 29 Express Scripts Holding Co, the
largest pharmacy benefits manager in the United States, reported
an adjusted profit that beat analysts' estimates for the fifth
straight quarter, helped by a fall in expenses and growth in its
The company, which administers drug benefits for employers
and health plans and runs large mail-order pharmacies, has been
cutting costs as a weak economy has hurt demand for healthcare
But Express Scripts and its peers such as CVS Caremark Corp
and Catamaran Corp stand to gain from a rise in
sales of generic drugs, which typically offer higher margins
than branded drugs. Also, several blockbuster drugs are slated
to go off patent from 2015.
Companies that provide their employees' insurance encourage
the use of generic drugs to bring down their healthcare costs.
Express Scripts said 80.9 percent of prescriptions it filled
in the second quarter were for generic drugs, up from 77.8
The company also raised its current-year profit forecast for
the second time. Express Scripts lifted its forecast to
$4.26-$4.34 per share from $4.23-$4.33.
Analysts on average were expecting earnings of $4.30 per
share for the year, according to Thomson Reuters I/B/E/S.
Pharmacy benefit managers are expected to gain from the
implementation of healthcare exchanges and the expansion of
Medicaid, which will likely provide insurance to about 30
million people over the next decade.
Excluding items, the company earned $1.12 per share in the
second quarter. Analysts on average had expected earnings of
$1.10 per share.
"The guidance was taken up modestly, but I think that was
expected, relative to the beat, some of which was driven by
better tax," ISI Group analyst Ross Muken told Reuters.
"The likely driver of the beat was probably the specialty
Express Scripts operates specialty pharmacies that dispense
high-cost drugs to treat specific chronic diseases. In its
latest annual filing with the U.S. Securities and Exchange
Commission, the company said it had 11 specialty home delivery
pharmacies and 77 specialty branch pharmacies.
Selling, general and administrative expenses fell 28.9
percent to $1.13 billion in the quarter ended June 30.
Revenue fell 4 percent to $26.43 billion, but ahead of the
average analyst estimate of $25.52 billion.
"The revenue beat was driven by revenue per prescription,
which was higher than what the Street was projecting," Jefferies
& Co analyst Brian Tanquilut said.
Express Scripts said Chief Financial Officer Jeff Hall will
no longer serve in the role. The company, which started a search
for a new finance chief, did not cite a reason for Hall's
Matthew Harper, vice president of financial planning and
analysis, will serve as interim CFO from July 30, said the
company, which became the largest U.S. pharmacy benefits manager
after it bought rival Medco Health Solutions last year.
Express Scripts shares closed at $66.93 on the Nasdaq on
Monday. The stock was down 1 percent in after-hours trading.