CVS Caremark raises outlook, sees exchanges helping in 2014
By Phil Wahba
(Reuters) - CVS Caremark Corp raised its profit forecast for the year on Tuesday, as sales grew at its drugstore chain and it processed more prescriptions from new clients.
The company also said it expects private health insurance exchanges to help business next year.
Shares were up 2.4 percent at $63.44 in late-morning trade.
CVS, which operates the No. 2 U.S. drugstore chain and a major pharmacy benefits management business, reported total revenue rose 5.8 percent to $31.97 billion in the third quarter. Wall Street analysts expected $31.53 billion, according to Thomson Reuters I/B/E/S.
Looking ahead to 2014, CVS said its participation in public and private health insurance exchanges should lift revenue in 2014. The company will provide a more detailed forecast for 2014 and beyond at its analyst day on December 18.
Still, CVS Caremark Chief Executive Larry Merlo told investors on a conference call that the company expects large employers to take a "wait-and-see" approach to private health insurance exchanges, especially for active employees, based on his conversations with clients and private exchange operators.
Merlo also said large employers may choose to move retirees to the exchanges over time.
Private exchanges mimic the coverage mandated under the U.S. Affordable Care Act and allow a company's employees to choose a plan from multiple insurers, a sign of the shifting landscape for corporate healthcare because of rising costs. Continued...