CVS expects more Walgreen-Express Scripts gains
NEW YORK—CVS Caremark said Thursday that it expects the effects of the dispute between Walgreen and Express Scripts to keep adding to its net income for the rest of 2012 even though the companies are making peace.
CVS Caremark Corp. says it expects to keep at least half the former Walgreen customers it gained in late 2011, before Walgreen stopped filling prescriptions for Express Scripts. It said that additional business will add about 5 cents per share to its net income in the third and fourth quarter of 2012. That's less than it gained in the first half of the year.
Walgreen stopped filling prescriptions for Express Scripts on Jan. 1 after a long dispute about the fees Express Scripts paid Walgreen to fill prescriptions. The companies said Thursday that Walgreen will rejoin the Express Scripts Holding Co. network on Sept. 15.
But CVS and other drugstores started gaining business even before the split became official as companies whose drug benefits were handled by Express Scripts transferred their prescriptions.
CVS said the dispute between Walgreen Co. and Express Scripts added about 3 cents per share to its net income in the first quarter. CVS has not yet reported its second-quarter results, but it expects a benefit of another 3 to 4 cents per share.
The turmoil benefited CVS Caremark in two ways. It runs the largest drugstore chain after Walgreen and the biggest pharmacy benefits management business after Express Scripts.
Woonsocket, R.I.-based CVS has said it expects to earn $3.23 to $3.33 per share in 2012 excluding one-time items. Analysts expect $3.33 per share on average, according to FactSet.
Shares of CVS Caremark lost $2.25, or 4.6 percent, to $46.20. in morning trading. Walgreen shares rose $3.24, or 10.5 percent, to $34.21 per share.