Drug store and pharmacy operator CVS Caremark said Thursday its second-quarter profit grew 7 percent as sales at its retail drug stores rose.
CVS said its profit rose to $771.2 million, or 53 cents per share, in the quarter ended June 28, from $720.1 million, or 47 cents per share, a year earlier. Revenue increased 2 percent to $21.14 billion from $20.7 billion.
Excluding one-time costs such as acquisitions, the Woonsocket, R.I., company's profit came to 60 cents per share.
According to Thomson Financial, analysts expected 60 cents per share on $21.41 billion in revenue, excluding one-time items.
Shares of CVS rose 67 cents, or $3.43, to $20.23 in early trading.
CVS Caremark Corp.'s retail drugstore sales rose 4.6 percent to $11.77 billion, and pharmacy services sales edged up 1 percent to $10.66 billion.
Same-store sales, or sales at locations open at least one year, grew 3.7 percent from the same period a year earlier at the CVS/pharmacy business. Front-end same-store sales grew 1.8 percent. The results are considered a key measurement of retailer health.
Higher enrollment in the Medicare Part D business helped increase retail network claims 2.7 percent, to 136.3 million.
The company said greater sales of generic drugs hurt pharmacy sales, and some of its Easter sales shifted into the first quarter because the holiday occurred in March this year instead of April.
Mail service claims fell 18.9 percent from 2007, when CVS was handling mail orders for the Federal Employees Health Benefit Plan. CVS's contract with the health plan expired on Dec. 31, 2007.
CVS paid $97.8 million in amortization costs, including a loss of $48.7 million because it guarantees store leases for its former subsidiary Linens 'n Things. Linens Holding Co. filed for Chapter 11 bankruptcy protection in May, and CVS said it may be required to fulfill the leases on some Linens stores.
CVS operated 6,308 retail pharmacies at the end of the quarter, along with 56 specialty pharmacies and 26 mail-order pharmacies. During the quarter, it opened 49 new retail pharmacies and closed eight others.
