The giant pharmacy benefit manager has been flexing its muscles all year and, just this week, promised even more powerful results to come. The company said late Monday it now expects to deliver a 2006 profit of between $3.10 and $3.22 a share -- even after 10 cents' worth of options expense -- instead of the $2.98 Wall Street had been anticipating. The company pointed to a variety of forces, ranging from rising generic drug use to specialty pharmacy growth, as major profit drivers.
"We have a great opportunity in 2006 to continue to provide value-added, fully integrated pharmacy benefit management services that will help our clients continue to better manage their drug trend," Express Scripts CEO George Paz said when he offered the company's much-awaited update. "Our positive outlook for 2006 reflects the strength of our core business and the success of our business model."
The company's stock jumped 3.2% to $83.34 following that forecast.
Early CallsBy now, investors have come to expect plenty from PBMs in general and Express Scripts in particular. Express Scripts' stock has proven to be a star performer already, rocketing past the broader market -- and even rivals Medco (MHS) and Caremark (CMX) -- over the past year. Thus, many people have assumed that the company would send more good news their way. In a brief note published on Monday morning, SG Cowen analyst Kemp Dolliver portrayed the company's 2006 outlook as little more than a "short-term risk" to the stock. If anything, Dolliver assumed that the stock would at least hold steady.
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Express Scripts accelerates