Wall Street looks for updates on consumer spending and PBM in CVS Caremark earnings

Earnings Preview: CVS Caremark to report 4Q

WOONSOCKET, R.I. — Drugstore operator and pharmacy benefits manager CVS Caremark Corp. reports its fourth-quarter results before the stock market opens Monday.

WHAT TO WATCH FOR: Positive news from the Caremark pharmacy benefits management business, which has lost billions of dollars in contracts in recent months. Better sales at the company’s 7,000 drugstores, which could indicate the economic slump is easing.

Three months ago, CVS said the Caremark business had lost about $4.8 billion in business for 2010. The company’s stock dropped 20 percent in a single day, although it has since recovered some of those losses.

The Caremark unit was already struggling against rivals like Medco Health Solutions and Express Scripts, but the company now expects Caremark’s profit to fall 10 to 12 percent this year. Since then, Per Lofberg has taken over as president of the PBM, replacing Howard McLure.

WHY IT MATTERS: CVS handles more prescriptions than any other company in the U.S. It’s the second largest drugstore chain in the country in terms of stores and the third largest pharmacy benefits manager in terms of revenue.

WHAT’S EXPECTED: Analysts polled by Thomson Reuters expect a profit of 78 cents per share and $26.22 billion in revenue.

LAST YEAR’S QUARTER: In the last quarter of 2008, CVS earned $949.3 million, or 65 cents per share, on revenue of $24.14 billion.