WOONSOCKET, R.I. — CVS Caremark Corp. reported a 21 percent drop in third-quarter profit yesterday as its pharmacy benefit unit continued losing business from previously canceled contracts.
CVS said net income fell to $809 million, or 59 cents per share, from $1.02 billion, or 71 cents per share, in the prior-year period. Earnings in 2009 benefited from $156 million in tax benefits, or 11 cents per share.
Excluding one-time acquisition costs, the company would have earned 65 cents per share, in line with average estimates.
Revenue fell 3.1 percent to $23.88 billion.
CVS lowered the upper range of its full-year guidance to between $2.68 and $2.70 per share. It previously forecast between $2.68 and $2.73. The company attributed the revision to costs for streamlining its pharmacy benefits management unit. Analysts expect average full-year earnings of $2.71 per share.
In the past year, CVS has reported billions in lost contract revenue for its Caremark unit, which provides prescription drug purchasing and other pharmacy services.
Investors and analysts still question the wisdom of CVS’s 2007 acquisition of Caremark for an estimated $26 billion. The combination was designed to bring more prescription business to CVS pharmacies.
