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Earnings Preview: CVS Caremark posts on 3Q Tuesday


CVS Caremark Corp. irritated Wall Street in August when it lowered the top end of its 2013 earnings outlook. Analysts will be looking for a forecast update when the company releases third-quarter results Tuesday.

WHAT TO WATCH FOR: The Woonsocket, R.I., company in August narrowed its forecast to $3.90 to $3.96 per share because it had temporarily halted share buybacks in the second quarter while it negotiated a settlement with the Securities and Exchange Commission. Buying back company stock can boost earnings per share by lowering the share count.

The company's stock dipped in August but has since recovered. It's up nearly 30 percent this year and reached an all-time high price of $62.90 on Oct. 22.

CVS Caremark also said in August that enrollment in its SilverScript Medicare prescription drug coverage may drop due to sanctions imposed by the Centers for Medicaid and Medicare Services. Analysts will want an update on that as well.

WHY IT MATTERS: CVS Caremark is one of the biggest U.S. companies by revenue. With more than 7,500 drugstores, the company runs the second-largest chain in the United States after Walgreen Co. Its Caremark unit also is one of the nation's largest pharmacy benefits managers.

Pharmacy benefits managers, or PBMs, run prescription drug plans for employers, insurers and other customers.

WHAT'S EXPECTED: Analysts expect, on average, adjusted earnings of $1.02 per share on $31.5 billion in revenue, according to FactSet.

LAST YEAR'S QUARTER: CVS Caremark earned $1.01 billion, or 79 cents per share. Excluding one-time items, profit came to 85 cents per share. Revenue was $30.2 billion.


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