Medco Health 4Q profit jumps 24 pct due to new clients, higher prices on brand-name drugs
Pharmacy benefits manager Medco Health Solutions Inc. said Tuesday its profit climbed 24 percent in the fourth quarter on higher revenue due to higher prices for brand-name drugs and new clients.
The adjusted earnings and revenue figures topped analysts’ expectations and Medco reaffirmed its outlook for 2010. Its shares edged up 9 cents to $64.77 in premarket trading.
The company said profit rose to $341.5 million, or 70 cents per share, in the three months ended Dec. 26, up from $274.4 million, or 54 cents per share, a year ago.
Revenue rose 18 percent to $15.25 billion from $12.96 billion a year ago. At the company’s Accredo specialty pharmacy business, revenue jumped 18 percent to $2.46 billion.
Excluding valuation costs still being recognized related to its 2003 spinoff from Merck and Co., Medco said it earned 76 cents per share — a penny more than analysts surveyed by Thomson Reuters expected. Analysts were also looking for lower revenue of $15.09 billion.
Medco said it filled 227.4 million prescriptions during the quarter. That includes standard monthlong prescriptions and three-month prescriptions filled by mail. Prescriptions increased almost 15 percent from last year.
For the full year, the company earned $1.28 billion, or $2.61 per share, compared with profit of $1.1 billion, or $2.13 per share, in 2008. Revenue rose to $59.8 billion from $51.26 billion.
The company is also reaffirming its outlook for earnings of $3.28 to $3.38 per share, excluding charges, for the year. Analysts are looking for $3.36 per share. Medco said it has won $4.2 billion in business with new clients for 2010.