|
CVS edges past estimates
|
 |
October 30, 2000: 1:48 p.m. ET
No. 1 U.S. drugstore chain sees earnings increase more than 30 percent in 3Q
|
New York (CNNfn) - CVS Corp., the nation's No. 1 drugstore chain, on Monday reported a 30.5 percent increase in third-quarter earnings Monday edging past Wall Street's estimates.
Woonsocket, R.I.-based CVS (CVS: Research, Estimates) reported earnings excluding special items of $140 million, or 36 cents a share, compared with net earnings of $121.6 million, or 30 cents a share, in the year-earlier quarter. That's a 30.5 percent increase. Analysts polled by earnings tracker First Call had expected earnings of 35 cents a share.
Including a $19.2 million gain from the settlement of a lawsuit, the company earned $158.7 million, or 39 cents a share in the latest quarter.
CVS stock soared on the news, jumping $5.44 cents, or nearly 12 percent, to $51.94 in trading Tuesday.
 Revenue for the quarter increased 14 percent to $4.9 billion from $4.3 billion in the year-earlier quarter.
CVS Chairman Tom Ryan attributed the positive earnings to cost-control measures, which helped the company maintain operating margin expansion.
"This was a terrific quarter in which all key performance metrics moved in the right direction," Ryan said in a statement. "We were able to translate our strong sales growth into earnings per share that were higher than we originally anticipated."
During the quarter CVS opened 45 new stores, bringing the total number to 4,106 nationwide.
In addition, the company completed its acquisition of Stadtlander Pharmacy on Sept. 18. In July, CVS said its ProCare unit had signed an agreement to acquire Pittsburgh-based Stadtlander, a subsidiary of Bergen Brunswig Corp. (BBC: Research, Estimates), for an undisclosed price in cash. Ryan has said he expects the deal to bolster CVS' entry into the $14 billion specialty pharmaceutical business, which caters to patients with special drug care needs, such as HIV/AIDS, cancer and transplant patients.
| |
|
|
| |
|
Potent medicine
$4.9 billion net sales
12.2% same-store sales rise
18.7% pharmacy same-store sales rise
$48.93/share 52-wk high in October
|
|
|
CVS hopes the deal will help turn the company's Web site to profitability in early 2001 or 2001, officials said.
"The quarter came in a penny better than expectations. I think they answered a lot of skeptics' questions regarding cash flow, and that was put to rest," Jack Russo, an analyst with A.G. Edwards & Sons Inc., said.
Russo also said the Stadtlander deal is another positive for the company.
"It was a poorly run business. Hopefully they can provide some expertise," Russo said. 
|
|
|
|
|
 |
|
