May 2, 2018 / 11:11 AM / a year ago

CVS beats on higher prescription drug sales, shares up 4 percent

(Reuters) - CVS Health Corp (CVS.N) posted a better-than-expected first-quarter profit on Wednesday, helped by higher sales of prescription drugs at its stores, sending its shares up 4.3 percent in trading before the bell.

The company also said that it was sticking with its expectations of closing the $69 billion deal to buy Aetna Inc AET.N in the second half of the year.

CVS’s total same store sales increased 5.8 percent, while pharmacy same store sales surged 7.3 percent on higher prices of branded drugs and partnerships with other pharmacy benefits managers.

Overall revenue from the company’s retail business increased 5.6 percent to about $20.4 billion.

However, the company’s retail business accounts for a shrinking share of its total sales, with most revenue now coming from its pharmacy benefits manager, which serves as a middleman between insurance companies, pharmacies and drugmakers.

Net revenue from its pharmacy benefit management business rose 3.2 percent to $32.22 billion, driven by higher claims on costlier drugs among other things.

Net income attributable to the company rose to $998 million, or 98 cents per share, in the reported quarter ended March 31 from $952 million, or 92 cents per share, a year earlier.

Net revenue rose 2.6 percent to $45.69 billion.

Excluding items, it earned $1.48 per share, beating analysts’ estimates of $1.41, according to Thomson Reuters I/B/E/S.

Reporting by Manas Mishra in Bengaluru; Editing by Anil D'Silva

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