Express Scripts Profit Falls 5.1%

   By Tess Stynes 
 

Express Scripts Holding Co. said second-quarter earnings fell 5.1% on higher expenses related to acqusitions and transactions, other one-time items and a revenue decline.

The company's share price rose 1.1% to $68 in recent after-hours trading, as adjusted earnings topped the midpoint of the company's guidance. The pharmacy-benefits manager also projected third-quarter earnings mostly above analysts' expectations.

For the current quarter, the company forecast per-share earnings of $1.27-$1.31. Analysts polled by Thomson Reuters have expected $1.28. For the year, Express Scripts narrowed its per-share earnings estimate to $4.84-$4.92 from its previously lowered estimate of $4.82-$4.94.

Express Scripts also said integration of its April 2012 acquisition of Medco Health Solutions "resulted in isolated challenges for some clients."

The St. Louis-based company, which manages drug-benefit programs for health plans and corporate customers, said "certain account-management teams experienced turnover; often these relationships are key to retaining clients."

Citing market dynamics, Express Scripts expects its retention rate to be 92%-93% next year, contributing to an expected decline in claims volume of 1.5%.

Express Scripts reported a second-quarter profit of $515.2 million, down from $543 million a year earlier. Per-share, earnings increased to 67 cents from 66 cents, amid fewer shares outstanding. Excluding acquisition and integration-related costs, accounting adjustments and other items, adjusted earnings from continuing operations rose to $1.23 from $1.12. The company had projected $1.20-$1.24. Revenue decreased 4.8% to $25.11 billion.

Express Scripts reported adjusted claims--a measure that takes into account monthly prescriptions filled in retail pharmacies and 90-day fills through the company's mail-order business--fell 12% to $324.5 million. Excluding impacts from the roll-off of UnitedHealth Group Inc. (UNH) claims, the decline was 5%.

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