Caremark Beats, Lifts Guidance

Second-quarter earnings rise 20%.
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, aided by revenue contributions from the government's new Medicare Part D plan, posted a 20% rise in second-quarter profits and lifted its full-year guidance.

The Nashville, Tenn., pharmacy benefit manager said Tuesday that second-quarter earnings rose to $255.1 million, or 58 cents a share, from $212.8 million, or 47 cents a share, a year earlier. The results included a gain of 1 cent a share related to the settlement of a contractual dispute.

The earnings topped analysts' average estimate of 55 cents a share, according to Thomson First Call. Caremark's own guidance had called for earnings of 54 cents to 55 cents a share.

Sales rose to $9.44 billion from $8.2 billion, easily beating Wall Street's projection of $8.87 billion.

Caremark attributed the revenue growth to increases in both mail and retail sales, including the addition of Medicare Part D. Mail pharmacy revenue rose 11% to $3.2 billion, while retail revenue grew 17% to $6.2 billion.

The company now sees full-year earnings of $2.38 to $2.40 a share, including the 1-cent settlement gain. Previously, Caremark forecast earnings of $2.29 to $2.35 a share for 2006. Analysts target earnings per share of $2.34.

For the third quarter, Caremark anticipates earnings of 62 cents to 63 cents a share, compared with analysts' projection of 61 cents.