Express Scripts Inc.
) first quarter 2012 adjusted earnings of 73 cents per share
(excluding special items) missed the Zacks Consensus Estimate by 4
cents. Earnings were however 10.6% above the year-ago figure. The
jump in year-over-year earnings is attributable to higher revenues
and a lower share count.
First quarter revenues of $12.1 billion surpassed the Zacks
Consensus Estimate of $11.5 billion and the year-ago revenues of
Adjusted gross profit for the quarter improved 11.2% to $860.5
million, and adjusted selling, general and administrative expenses
went up 26.1% to $230.6 million.
Total claims at Express Scripts for the reported quarter came in
at 167.0 million as against 162.0 million in the first quarter of
2011. Claims comprise network claims, home delivery claims, and
specialty and other claims.
Specialty and other claims include drugs distributed through
patient assistance schemes and limited distribution contracts with
pharmaceutical manufacturers in addition to Emerging Market claims.
Total adjusted claims (thrice the home delivery claims since such
claims are typically 90-day claims) of 192.8 million were more than
the year-ago adjusted claims of 186.1.
Outlook for 2012
Express Scripts expects to end 2012 with adjusted earnings in
the range of $3.36 - $3.66 per share. The current Zacks Consensus
Estimate of $3.64 per share lies at the higher end of the guidance
Additionally, the company expects total adjusted claims to be
about 1.4 billion.
Express Scripts expects the acquisition of Medco Health (on
April 2, 2012) to be slightly accretive to earnings during the
integration period and moderately accretive once the integration is
complete. The company expects Medco to be fully integrated in the
first half of 2014. Moreover, Express Scripts expects to generate
$1 billion in synergy, following the integration of the two
Currently, we have a Neutral recommendation on Express Scripts.
The stock carries a Zacks #3 Rank (Hold rating) in the
EXPRESS SCRIPTS (ESRX): Free Stock Analysis
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