The Associated Press
Express Scripts reported a 20 percent boost in profit for the third quarter, but executives for the pharmacy benefit manager cautioned that the company faces a weaker outlook heading into 2013, and its shares plunged in aftermarket trading.
Express said in a statement "the current weak business climate and the unemployment outlook" could restrain performance next year. "Despite near-term headwinds and a challenging macroeconomic environment, we remain confident we are well-positioned for continued growth," said Express CEO George Paz.
Pharmacy benefits managers, or PBMs, run prescription drug plans for employers, insurers and other customers. They process mail-order prescriptions and handle bills for prescriptions filled at retail pharmacies.Company shares dropped $9.15, or 14.6 percent, to $53.73 in late trading. The company closed its $29.1 billion acquisition of Medco, a fellow pharmacy benefits manager, or PBM, in early April. The deal created a company big enough to handle the prescriptions of more than one in three Americans. The acquisition affected Express Scripts' results across the board, increasing revenue by 133 percent to $26.9 billion. Adjusted prescriptions increased 116 percent to 399 million. The measure counts 90-day mail order prescriptions as three one-month prescriptions. The company reported net income of $391 million, or 47 cents per share in the three months that ended September 30. That compares to earnings of $324.7 million, or 66 cents per share, in last year's quarter. The company's outstanding shares ballooned after the Medco acquisition, pushing down per-share results. Excluding the impact of the transaction, the company would have earned $1.02 per share in the quarter. Analysts expected earnings of 99 cents per share on $27.5 billion in revenue, according to FactSet. The company raised the lower range of its earnings guidance, predicting 2012 results between $3.65 and $3.75. Wall Street expects, on average, profit of $3.71 per share, with estimates ranging from $3.61 to $3.80.