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Caremark Cruises Past Estimate

It raises the low end of its 2006 earnings guidance.
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fourth-quarter earnings rose 42% from a year ago, as revenue inched up, overhead fell and the company recorded a gain from the sale of a subsidiary.

The pharmacy benefit manager earned $290.7 million, or 64 cents a share, in the quarter, compared with $205.1 million, or 45 cents a share, a year ago. Adjusted for one-time items, Caremark earned 55 cents a share in the latest quarter, beating estimates by 4 cents a share.

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Sales rose 4% from last year to $8.37 billion, topping the Thomson First Call consensus estimate of $8.26 billion. Caremark said fourth-quarter mail pharmacy revenue rose 30% to $3 billion, while retail revenue fell 6% to $5.3 billion.

For the current first quarter, Caremark expects to earn 50 cents or 51 cents a share, excluding stock-options expense, compared with the Thomson First Call consensus estimate of 50 cents a share. For 2006, Caremark expects to earn $2.33 to $2.38 a share excluding options, compared with the consensus estimate of $2.30.

Caremark's previous 2006 guidance was for $2.30 to $2.38 a share.

"Two thousand five was a very good year, both for our clients as well as our shareholders," the company said. "Caremark saw strong growth in mail penetration and generic dispensing rates during the year, helping our clients effectively manage a very important part of their healthcare costs and generating strong financial results for our shareholders."

The stock closed at $49.01 Tuesday.