CVS Health on a roll as earnings rise

The company reported that its second-quarter net income rose 2.1% to $1.27 billion. Adjusted earnings came to $1.22 per share, beating Zacks Investment Research analyst consensus of $1.20 per share.

Net revenues rose 7.4% to $37.2 billion.

“On an underlying basis, we surpassed the high end of our guidance range by two cents, as operating profit in the retail business exceeded our expectations while operating profit in the PBM was in line with our guidance,” said CVS Health president and CEO Larry Merlo. “We have also generated more than $2.1 billion in free cash flow in the first half of 2015, putting us well on our way to return more than $6 billion to shareholders through dividends and share repurchases this year.”

Revenues in the company’s retail pharmacy segment increased 2.2% to $17.2 billion in the three months ended June 30. Same-store sales increased 0.5% versus the second quarter of last year, with pharmacy same-store sales up 4.1% and front store same-store sales down 7.8%.

On a comparable basis, front store same-store sales would have been approximately 780 basis points higher if tobacco and the estimated associated basket sales were excluded from the three months ended June 30, 2014.

Pharmacy same-store prescription volumes rose 4.8% on a 30-day equivalent basis.

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