On Nov. 1, CVS (NYSE:CVS) released third-quarter earnings for the period ended Sept. 30, 2006.

  • CVS experienced an increase in same-store sales in both the front and back parts of its stores. Same-store merchandise sales increased 6.4%, and same-store pharmacy sales rose 10.2%.
  • Free cash flow, though negative, improved because of higher cash flow from operations and flat capital expenditures.
  • Long-term debt increased by a whopping 101.5% to $3.28 billion as the company purchased 701 Sav-On and Osco stores.
  • The stock has a three-star rating in Motley Fool CAPS.

(Figures in millions, except per-share data)

Income Statement Highlights

Avg. Est.

Q3 2006

Q3 2005

Change

Sales

$11,234

$11,210

$8,970

25.0%

Net Profit

--

$281

$249

12.6%

EPS

$0.32

$0.33

$0.30

10.0%

Diluted Shares

--

855

845

1.2%



Get back to basics with a look at the income statement.

Margin Checkup

Q3 2006

Q3 2005

Change*

Gross Margin

27.51%

26.77%

0.74

Operating Margin

4.79%

4.89%

(0.10)

Net Margin

2.50%

2.78%

(0.28)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q3 2006

Q3 2005

Change

Cash + ST Invest.

$395

$368

7.2%

Accounts Rec.

$2,197

$1,783

23.2%

Inventory

$7,015

$5,697

23.1%



Liabilities

Q3 2006

Q3 2005

Change

Accounts Payable

$2,817

$2,325

21.2%

Long-Term Debt

$3,280

$1,628

101.5%

Learn the ways of the balance sheet.

Cash Flow Highlights

YTD 2006

YTD 2005

Change

Cash From Ops.

$993

$852

16.6%

Capital Expenditures

$1,116

$1,140

(2.1%)

Free Cash Flow

($123)

($289)

N/A



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  • Rite Aid (NYSE:RAD)

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