PROVIDENCE, R.I. – Drugstore chain CVS Corp. (CVS) said Wednesday that its second-quarter profit rose 18 percent, beating Wall Street expectations on strong sales growth led by generic-drug sales.
Woonsocket-based CVS, which acquired the Eckerd (search) drugstore chain last July, reported earnings of $275.9 million, or 33 cents per share, compared with $234.5 million, or 28 cents per share, over the same period last year.
Sales rose 31 percent to $9.1 billion from $6.9 billion a year ago.
The consensus estimate of analysts surveyed by Thomson Financial was for earnings of 31 cents per share, on estimated revenue of $9.06 billion. CVS operated 5,439 retail and specialty pharmacy stores in 36 states and the District of Columbia as of July.
Sales at stores open more than one year, a closely watched metric known as same-store sales, rose 5.6 percent, with pharmacy same-store sales jumping 7.4 percent.
"The second quarter was another outstanding quarter for our company," CVS Chief Executive Tom Ryan said in a statement. "Our performance reflected strong sales growth and share gains, both in the front store and pharmacy businesses. We also continued to benefit from better-than-expected conversion to generic drugs."
The company raised its earnings-per-share estimate for the year to $1.36 to $1.39, a penny higher on each end than the previous forecast range. Analysts on average are expecting $1.37 per share.
The raised range "reflects our strong second-quarter performance across the company," Chief Financial Officer David Rickard said.
Rickard told investors that third-quarter earnings should be 29 cents to 31 cents per share, providing there's no impact from a nonrecurring tax benefit. Total sales for the full year are expected to increase 20 percent to 22 percent, the company said.
CVS said it had completed its integration of its acquired Eckerd stores, including more than 1,000 stores in Florida and Texas.
"We're optimistic about sales growth prospects for the acquired stores and what that means for the company," Rickard said.
The company also opened new stores in Arizona, Las Vegas, Chicago and Minneapolis in the second quarter.
"All of our new markets are exceeding our expectations," Rickard said.
Rickard said generic-drug sales currently account for 54 percent of the company's total prescription sales. He added the company expects $23 billion of brand-name drugs to come off patents next year, including Zoloft, Zocor, Provocol and Zithromax.
Shares of CVS fell 51 cents, or 1.6 percent, to $30.74 on the New York Stock Exchange (search). The stock has traded in a 52-week range between $19.31 and $31.60.