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CVS Sees Big PBM Disappointment

By Brian Gilmartin

 About this article:
 For Gilmartin's thoughts leading up to the call, click here. CVS Caremark reported third-quarter financial results this morning, with revenue of $24.642 billion slightly beating expectations of $24.6 billion, and the adjusted earnings per share (after adjusting for an 11-cent tax benefit) or actual operating EPS of 65 cents was better than the 64-cent estimate. Total revenue grew 18% year over year, while EPS grew just 8%. Operating income of $1 billion grew 25% from the year-ago period. By segment, pharmacy benefit management (PBM) revenue grew 23% to $13 billion, while claims processed improved 9% year over year, about in line with estimates. The retail drug store segment increased 18% to $13.6 billion. Same-store sales grew 5.7% year over year, while pharma comps rose 8% and front-end comps looked to be a little weak at 0.8%. At first blush, CVS' report looked to be in line...

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