The Motley Fool Previous Page


Express Scripts Earnings: An Early Look

http://www.fool.com/investing/general/2013/02/15/express-scripts-earnings-an-early-look.aspx

Dan Caplinger
February 15, 2013

Earnings season is in full swing, with huge numbers of companies having already given their latest numbers to investors, and Express Scripts (NASDAQ: ESRX) is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarterly reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed kneejerk reaction to news that turns out to be exactly the wrong move.

Pharmacy benefit management has become a huge part of the health-care business, and Express Scripts has become a giant in the industry. Let's take an early look at what's been happening with Express Scripts over the past quarter and what we're likely to see in its quarterly report next Monday.

Stats on Express Scripts

Analyst EPS Estimate

$1.05

Change From Year-Ago EPS

28%

Revenue Estimate

$27.28 billion

Change From Year-Ago Revenue

125%

Earnings Beats in Past 4 Quarters

2

Source: Yahoo! Finance.

Will Express Scripts prescribe better earnings to investors?
Analysts have been rock-solid in their expectations of Express Scripts over the past few months, holding their estimates unchanged. But the stock has done quite well, rising almost 9% since mid-November.

Express Scripts has enjoyed huge success from its buyout of Medco Health Solutions, which boosted its position against rival CVS Caremark (NYSE: CVS) to become the biggest pharmacy benefit manager in the country. Not only has revenue soared, but the deal has been accretive to earnings as well in remarkably short order.

Yet not everything has gone Express Scripts' way. UnitedHealth (NYSE: UNH) was a big Medco customer, but it decided to