CVS Caremark said Thursday its profit slipped 1 percent in the second quarter as its pharmacy benefits management business weathered lower prices on contract renewals.
CVS Caremark Corp.'s profit declined to $816 million from $821 million a year ago. On a per-share basis its profit was unchanged at 60 cents. Excluding one-time items, the company earned 65 cents per share. Revenue rose 11 percent to $26.63 billion from $24.01 billion.
Analysts were expecting a profit of 64 cents per share and $26.76 billion in revenue, according to FactSet.
The Woonsocket, R.I., company said Caremark faced lower prices related to contract renewals. The most significant of those was a large government contract the company renewed in the third quarter of 2010. While those renewals cut into its profit, total revenue for CVS Caremark rose 10.9 percent to $14.57 billion as the company began a new 12-year contract with Aetna Inc. and acquired Universal American Corp.'s Medicare Part D business.
The company handled 174 million claims, up almost 36 percent from last year. It said it filled 17.8 million claims through the mail, 11 percent more than last year.
Revenue from CVS drugstores grew 3.6 percent to $14.83 billion. Sales at stores open at least a year grew 2 percent, with pharmacy revenue up 2.6 percent and front-end revenue up 0.8 percent. Sales at stores open at least a year are considered a key measurement of retailer health because they exclude results from stores that have opened or closed within the last year.
CVS opened 41 stores during the second quarter and operated 7,266 retail drugstores at the end of the period. CVS is the second-largest U.S. drugstore chain behind Walgreen Co., which has more than 7,700 stores.
The company narrowed its profit forecast and said it now expects to earn between $2.75 and $2.81 per share in 2011. Its previous estimate called for a profit of $2.72 to $2.82 per share. Analysts expect CVS to earn $2.78 per share.