This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration. Need a new registration confirmation email? Click here
NEW YORK (AP) â¿¿ Shares of Express Scripts Holding Co. fell 12 percent on Tuesday after the pharmacy benefits manager said Wall Street's expectations for its 2013 earnings may be too optimistic.
THE SPARK: Express Scripts reported its third-quarter results after the market closed on Monday. The St. Louis company raised its estimates for 2012, but said its 2013 results will be hurt by factors including high unemployment and the loss of a contract with UnitedHealth Group Inc. In its quarterly earnings release Express Scripts said Wall Street's estimates for its 2013 net income were "overly aggressive."
On average, analysts expected the company to earn $4.50 per share, according to FactSet.
In a conference call Tuesday morning, Express Scripts Chairman and CEO George Paz said Express Scripts' health plan clients expect their membership rolls to decline in 2013. Paz said large employers are using contractors and part-time workers instead of hiring more full-time workers. That means fewer people are getting health insurance. Meanwhile, smaller companies are postponing health care coverage choices as they wait to see how the health care market develops, he said.
High unemployment is also reducing doctor visits, elective surgeries and prescription use, Paz added.
THE BIG PICTURE: Express Scripts runs prescription drug plans for employers, insurers and other customers. It processes mail-order prescriptions and handle bills for prescriptions filled at retail pharmacies. It is the largest U.S. company of its kind, having bought competitor Medco Health Solutions earlier this year for $29.1 billion. Express Scripts is now on pace to handle more than a billion prescriptions a year.
Express Scripts' third-quarter net income surpassed Wall Street estimates, and the company said it now expects to earn between $3.65 and $3.75 per share in 2012, up from its previous estimate of $3.60 to $3.75 per share. Analysts had forecast $3.71 per share on average.