(Reuters) - Drugstore chain and pharmacy benefits manager CVS Health Corp reported a higher-than-expected quarterly profit, helped by demand for high-margin specialty pharmacy services.
Revenue rose 3 percent, also topping estimates. However, sales at CVS pharmacies open for more than a year fell 4.7 percent as they filled fewer prescriptions and sold more generic drugs.
Same-store sales at the front-end of stores, where the company sells beauty products, snacks and over-the-counter drugs, also fell 4.9 percent in the first quarter ended March 31.
The high-margin business has reported a drop in sales for a year, hit by weak traffic.
Revenue from CVS's pharmacy services business rose 8.5 percent to $31.2 billion due to an increase in claims across its network and strong demand for its specialty pharmacy service.
The specialty pharmacy service provides expensive drugs to people with chronic conditions such as rheumatoid arthritis.
Net income attributable to CVS fell to $952 million, or 92 cents per share, in the first quarter ended March 31, from $1.15 billion, or $1.04 per share, a year earlier.
Interest expense fell 11 percent to $252 million, while the company also got $19 million in tax benefits from the adoption of new accounting guidance for share-based compensation.
Excluding items, the company earned $1.17 per share.
Revenue rose 3 percent to $44.51 billion.
Analysts on average had expected earnings of $1.10 per share on revenue of $44.20 billion, according to Thomson Reuters I/B/E/S. (Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Sai Sachin Ravikumar and Saumyadeb Chakrabarty)
May 2, 2017 at 08:23AM
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