CVS Caremark 1st-qtr outlook falls short of estimates, but 2010 forecast meets expectations

CVS Caremark gives 2010 and 1Q forecasts

WOONSOCKET, R.I. — CVS Caremark Corp. on Monday forecast profit and revenue that were about equal to Wall Street expectations for the full year 2010.

The drugstore operator and pharmacy benefits manager said it will earn $2.56 to $2.65 per share for the year. Excluding one-time items, that total rises to $2.74 to $2.84 per share. It expects revenue will be about flat with its 2009 total of $98.73 billion, but could rise as much as 2 percent, to about $100.7 billion.

The revenue guidance excludes inter-company eliminations, or revenue that is counted for both the drugstore and Caremark pharmacy benefits management divisions.

Analysts surveyed by Thomson Reuters expect a profit of $2.78 per share on $100.5 billion in revenue, on average.

CVS said revenue for the Caremark pharmacy benefits management business will fall 4 to 6 percent to a range of $48 billion to $49.02 billion. The company expects Caremark’s profit to fall 10 to 12 percent because it has lost billions in contract revenue.

Drugstore revenue will grow 5.5 to 7.5 percent, which implies a total of $58.4 billion to $59.51 billion. Revenue from stores owned and operated by CVS for at least one year will grow 4 to 6 percent. Retail profits are expected to rise 13 to 16 percent.

For the first quarter, CVS forecast a profit of 53 to 55 cents per share, or 57 to 59 cents per share excluding one-time costs and gains. Revenue is seen growing 3 to 4 percent, suggesting a total of $24.1 billion to $24.33 billion.

Analysts expect 62 cents per share in profit and $24.38 billion in revenue.

CVS said it bought back $500 million in stock during the fourth quarter, and the company plans to buy back another $1.5 billion by the end of June.

The company also reported its fourth-quarter results on Monday, and in morning trading, its shares rose $1.93, or 6.2 percent, to $33.