CVS Health misses profit forecasts
CVS Health's third-quarter profit jumped 30 percent but that was still short of Wall Street expectations, and an early peek at 2016 from the nation's second-largest drugstore chain also disappointed.
The Woonsocket, Rhode Island, company said Friday it expects adjusted earnings of $5.68 to $5.88 next year, which represents growth of 10 percent to 14 percent.
Analysts forecast, on average earnings of $5.99 per share, according to FactSet.
CVS Health (CVS) also tightened its forecast for current year to $5.14 to $5.18 per share after narrowing it in August to $5.11 to $5.18 per share.
FactSet says analysts expect $5.16 per share, on average.
The company's stock started sliding a couple hours before markets opened Friday and after it detailed results.
In the third quarter, CVS Health earned $1.24 billion, not counting $10 million in discontinued operations. That compares to $948 million in last year's quarter, when the company also booked a $521-million loss on the early retirement of some debt.
Earnings, adjusted for one-time gains and costs, came to $1.28 per share.
Analysts surveyed by Zacks Investment Research expected, on average, earnings of $1.30 per share.
But the company's revenue grew 10 percent to $38.64 billion, which topped the average analyst forecast for $37.76 billion.
CVS Health runs 7,911 drugstores in 44 states, the District of Columbia and Brazil. It also has one of the nation's biggest pharmacy benefits management, or PBM, businesses. PBMs help negotiate the prices that customers pay for prescription drugs.
In August, the Woonsocket, Rhode Island, company closed a more than $10-billion deal to buy the pharmaceutical distributor Omnicare, an acquisition that will give it national reach in dispensing prescription drugs to assisted living and skilled nursing homes, long-term care facilities, hospitals and other care providers.
Shares of CVS Health were down 3.7 percent, or $3.80, to $100 in pre-market trading on Friday. CVS Health shares have increased nearly 8 percent since the beginning of the year, while the Standard & Poor's 500 index has climbed 1.5 percent.