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CVS Spikes as Sales Top Drugstore Rivals

CVS Caremark is spiking after it announce today that its sales topped that of its rivals -- Rite Aid and Walgreen -- and it issued a 2010 outlook that could beat Wall Street's forecast.



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CVS Caremark

(CVS) - Get CVS Health Corporation Report

is spiking after it announced in today's earnings report that its sales topped that of rivals

Rite Aid

(RAD) - Get Rite Aid Corporation Report





CVS also issued a 2010 outlook that could best Wall Street's forecast.

The most promising metric for CVS during the fourth quarter was same-store sales, which jumped 4.9%. In comparison, Walgreen reported an unexpected 1.1% decline in January same-store sales, while Rite Aid slipped 2.1% for the month.

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IBISWorld analyst Toon van Beeck attributes CVS' sales to its mail-order business, which he says has been more successful than similar programs at Walgreen and Rite Aid.

During the quarter, CVS earned $1.05 billion, or 74 cents per share, compared with $949 million, or 65 cents, in the year-ago period.

Excluding one-time costs, the company actually earned 79 cents per share, a penny above analysts' estimates.

Revenue grew 7% to $25.82 billion from $24.14 billion, but fell short of Street estimates of $26.22 billion.

At CVS's Caremark division, which handles drug benefits for health plan sponsors and members, revenue rose 14.5% to $13.49 billion.

The company did not reveal any new contract losses for the business. Instead, management reassured investors that its announcement, back in November, of the $4.8 billion it lost in contract revenue was a one-time issue.

Looking ahead, CVS forecasts a profit in the range of $2.74 to $2.84 a share for the year, while analysts are calling for $2.78 a share.

For the first quarter, management predicts earnings between 57 cents and 59 cents a share, lower than the 62 cent forecast from analysts.

Shares of CVS are climbing 6.3% to $33.01, while Walgreen is up 1.4% to $33.76 and Rite Aid is off 0.8% to $1.30.

-- Reported by Jeanine Poggi in New York.

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