Investors will be looking for information about Medco Health Solutions Inc.'s sale to Express Scripts Inc. and on U.S. prescription trends when the company reports its third-quarter results Wednesday.
WHAT TO WATCH FOR: Medco agreed to be acquired by Express Scripts in July. The deal values Medco at $29.1 billion in cash and stock, or $71.36 per share, and it would create by far the largest pharmacy benefits management company in the U.S. The new Express Scripts would handle approximately 30 percent of all prescriptions in the U.S. The companies say they would be able to save money for consumers and health plans by negotiating lower drug prices, but critics say clients would have fewer choices and the savings may not materialize.
The Federal Trade Commission is reviewing the proposed deal. A House of Representatives subcommittee held a hearing on the deal in September and a Senate subcommittee plans to do the same in November. Medco and Express Scripts say they hope to complete the transaction in the first half of 2012.
WHY IT MATTERS: The Franklin Lakes, N.J., company is one of the largest pharmacy benefits managers in the U.S. It handles hundreds of millions of prescriptions every year and makes its money by reducing costs for health plan sponsors and members. Its results also give insight into prescription trends in the U.S. Medication use has been hurt by the weak economy, as consumers are postponing or canceling visits to their doctors to save money.
WHAT'S EXPECTED: Analysts polled by FactSet expect Medco to report a profit of $1.05 per share on revenue of $17.04 billion.
LAST YEAR'S QUARTER: Medco earned $371.5 million, or 85 cents per share, on $16.32 billion in revenue.