Express Scripts 3rd-quarter net income rises 9 per cent; company raises low end of outlook

NEW YORK, N.Y. – Express Scripts says its third-quarter net income climbed 9 per cent, and the nation’s largest pharmacy benefits manager gave a more optimistic earnings forecast for the year.

The St. Louis company said Thursday it earned $426.7 million, or 52 cents per share. That compares to earnings of $391.4 million, or 47 cents per share, in last year’s quarter. Excluding one-time items, Express Scripts Holding Co. earned $1.08 per share.

Revenue fell 3 per cent to $25.92 billion.

Analysts forecast, on average, adjusted earnings of $1.08 per share on about $25 billion in revenue, according to FactSet.

Pharmacy benefits managers, or PBMs, run prescription drug plans for employers, insurers and other customers. They process mail-order prescriptions and handle bills for prescriptions filled at retail pharmacies.

Adjusted claims from continuing operations fell 9 per cent during the quarter to 358.1 million, including the expected roll-off of claims from UnitedHealth Group. The measure counts 90-day mail order prescriptions as three one-month prescriptions.

Express Scripts raised the low end of its net income guidance based on its results and a lower-than-expected tax rate. It now expects adjusted net income of $4.30 to $4.34 per share, compared to its previous range of $4.26 to $4.34 per share.

Analysts expect $4.31 per share, on average.

Express Scripts said it expects to earn between $1.09 and $1.13 per share in the fourth quarter excluding one-time items. Analysts expect $1.12 per share on average.

The company cut its cash flow estimate by $500 million because of delays in moving Medco’s legacy payment cycles to its own payment cycles. Express Scripts now expects 2013 cash flow between $4 billion and $4.5 billion.

In after-hours trading, shares of the company slipped 4.7 per cent to $60.75. The stock is up 18 per cent in the year to date through the close of regular-session trading Thursday.