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Express Scripts (ESRX) Q3 Earnings in Line, Revenues Lag
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Pharmacy benefit manager Express Scripts Holding Company posted third-quarter 2016 earnings per share (excluding special items) of $1.74, in line with the Zacks Consensus Estimate. Reported earnings were up 20% from the year-ago period.
On a reported basis, earnings came in at $1.15 per share, up 19% from the year-ago quarter.
Quarterly Highlights
Revenues of $25.4 billion marginally missed the Zacks Consensus Estimate of $25.6 billion but were up 0.8% from the year-ago quarter figure of $25.2 billion.
Adjusted gross profit was up 4.5% at $2.3 billion. Adjusted selling, general and administrative expenses were $449.8 million, down 15.1%.
Total adjusted claims amounted to 312.2 million, down 5% year over year reason due to faster roll-off of the Coventry business.
In Jul 2016, the company issued senior notes – $1,000.0 million of 3% senior notes due Jul 2023, $1,500.0 million principal amount of 3.4% senior notes due Mar 2027 and $1,500.0 million aggregate principal amount of 4.8% senior notes due Jul 2046. The net proceeds will be used to repay a portion of its 2015 two-year term loan, complete a tender offer for its 2.650% senior notes due 2017 and close another tender offer for a portion of each of the 7.125% senior notes due 2018 issued by Medco Health Solutions, Inc., along with the 7.250% senior notes due 2019 issued by the company.
During the quarter, the company repurchased a total of 14.1 million shares (including the 6.2 million shares received under the 2016 accelerated share repurchase program) for $1.1 billion.
2016 Guidance
Express Scripts narrowed its earnings outlook for 2016. The company now anticipates earnings in the range of $6.36 to $6.42 per share, compared to the previous projection of $6.33–$6.43. The Zacks Consensus Estimate of $6.37 is well within the guided range.
The company estimates adjusted claims for 2016 in the range of 1,265 million to 1,280 million compared to the previous range of 1,260–1,290 million.
For the fourth quarter of 2016, Express Scripts expects earnings in the range of $1.84 to $1.90 per share. The Zacks Consensus Estimate of $1.85 is well within the guided range. Adjusted claims for fourth quarter of 2016 are projected in the range of 314 million to 329 million.
Express Scripts currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include PRA Health Sciences, Inc. , BioMarin Pharmaceutical Inc. (BMRN - Free Report) and Exelixis, Inc. (EXEL - Free Report) . Each of these stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
PRA Health has posted a positive earnings surprise in all of the four trailing quarters with an average beat of 12.97%. Its share price has increased 23.7% year to date.
BioMarin’s loss estimates have narrowed from 28 cents to 25 cents for 2016 and from $1.16 to $1.11 for 2017 over the last 60 days.
Exelixis’ loss estimates have narrowed from 71 cents to 63 cents for 2016 and from 19 cents to a gain of 3 cents for 2017 over the last 60 days. The company has posted a positive earnings surprise twice in the four trailing quarters with an average beat of 9.1%. Its share price has surged 100.4% year to date.
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Express Scripts (ESRX) Q3 Earnings in Line, Revenues Lag
Pharmacy benefit manager Express Scripts Holding Company posted third-quarter 2016 earnings per share (excluding special items) of $1.74, in line with the Zacks Consensus Estimate. Reported earnings were up 20% from the year-ago period.
On a reported basis, earnings came in at $1.15 per share, up 19% from the year-ago quarter.
Quarterly Highlights
Revenues of $25.4 billion marginally missed the Zacks Consensus Estimate of $25.6 billion but were up 0.8% from the year-ago quarter figure of $25.2 billion.
Adjusted gross profit was up 4.5% at $2.3 billion. Adjusted selling, general and administrative expenses were $449.8 million, down 15.1%.
Total adjusted claims amounted to 312.2 million, down 5% year over year reason due to faster roll-off of the Coventry business.
In Jul 2016, the company issued senior notes – $1,000.0 million of 3% senior notes due Jul 2023, $1,500.0 million principal amount of 3.4% senior notes due Mar 2027 and $1,500.0 million aggregate principal amount of 4.8% senior notes due Jul 2046. The net proceeds will be used to repay a portion of its 2015 two-year term loan, complete a tender offer for its 2.650% senior notes due 2017 and close another tender offer for a portion of each of the 7.125% senior notes due 2018 issued by Medco Health Solutions, Inc., along with the 7.250% senior notes due 2019 issued by the company.
During the quarter, the company repurchased a total of 14.1 million shares (including the 6.2 million shares received under the 2016 accelerated share repurchase program) for $1.1 billion.
2016 Guidance
Express Scripts narrowed its earnings outlook for 2016. The company now anticipates earnings in the range of $6.36 to $6.42 per share, compared to the previous projection of $6.33–$6.43. The Zacks Consensus Estimate of $6.37 is well within the guided range.
The company estimates adjusted claims for 2016 in the range of 1,265 million to 1,280 million compared to the previous range of 1,260–1,290 million.
For the fourth quarter of 2016, Express Scripts expects earnings in the range of $1.84 to $1.90 per share. The Zacks Consensus Estimate of $1.85 is well within the guided range. Adjusted claims for fourth quarter of 2016 are projected in the range of 314 million to 329 million.
EXPRESS SCRIPTS Price, Consensus and EPS Surprise
EXPRESS SCRIPTS Price, Consensus and EPS Surprise | EXPRESS SCRIPTS Quote
Zacks Rank & Key Picks
Express Scripts currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include PRA Health Sciences, Inc. , BioMarin Pharmaceutical Inc. (BMRN - Free Report) and Exelixis, Inc. (EXEL - Free Report) . Each of these stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
PRA Health has posted a positive earnings surprise in all of the four trailing quarters with an average beat of 12.97%. Its share price has increased 23.7% year to date.
BioMarin’s loss estimates have narrowed from 28 cents to 25 cents for 2016 and from $1.16 to $1.11 for 2017 over the last 60 days.
Exelixis’ loss estimates have narrowed from 71 cents to 63 cents for 2016 and from 19 cents to a gain of 3 cents for 2017 over the last 60 days. The company has posted a positive earnings surprise twice in the four trailing quarters with an average beat of 9.1%. Its share price has surged 100.4% year to date.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>