CVS’S 3Q BENEFITS FROM GENERICS, SPECIALTY DRUGS: WOONSOCKET, R.I. (AP) — CVS Health Corp. reported better-than-expected third-quarter earnings Tuesday as increased use of specialty drugs helped offset missing sales of tobacco products, which the company stopped selling this fall.
CVS Health runs the nation’s second-largest drugstore chain with more than 7,700 locations and one of the largest pharmacy benefits management, or PBM, businesses.
The company’s net income fell to $948 million, or 81 cents per share, from $1.25 billion, or $1.02 per share a year earlier. Earnings, adjusted to extinguish debt and for amortization costs, were $1.15 per share.
The results exceeded Wall Street expectations, with the average estimate of analysts surveyed by Zacks Investment Research at $1.14 per share.
Revenue rose to $35.02 billion in the period, also surpassing Street forecasts. Analysts expected $34.65 billion, according to Zacks.
Revenue from its PBM side increased 16 percent, and operating profit from that segment increased 7.3 percent, helped by new business and specialty drug growth.
Specialty drugs are very expensive, usually injected, drugs for complex chronic health conditions — a category that is driving overall spending on medications. CVS has started a new program called Specialty Connect that allows customers with these prescriptions to either pick them up at pharmacies or through the mail.
CVS said revenue from its retail pharmacy business increased 3 percent and was negatively impacted by the loss of tobacco sales. The company said missing sales of cigarettes and other items smokers purchase at stores hurt earnings by 3 cents per share. CVS said the full-year impact of missing tobacco products would reduce earnings by 7 to 8 cents per share.
CVS Health gained national attention in February after it promised to phase out sales of tobacco products from its stores. Company leaders said tobacco has no place in a health care setting, and stores phased out the products by late September.
The company narrowed its 2014 adjusted earnings guidance to between $4.47 and $4.50, from its previous forecast of $4.43 to $4.51, excluding the 27 cents-per-share loss on early extinguishment of debt.
Analysts expect, on average, earnings of $4.49 per share, according to FactSet.
DISNEY EXPANDS DIGITAL MOVIE SERVICE TO ANDROID: NEW YORK (AP) — The Walt Disney Co. is expanding its digital movies app that allows fans to watch movie purchases across devices to Android’s Google Play.
In February, the service, called Disney Movies Anywhere, launched in the Apple Store for iOS devices. Now registered users can download the service for either operating system for free and play movies they’ve purchased on both.
Disney, Pixar and Marvel movies that users have purchased can be watched via the app. The launch corresponds with the release of “Maleficent” and Disney’s animated “Planes: Fire & Rescue” out Tuesday on Blu-ray and digital download. About 450 movies are available to work with the service.
The app is built on The Walt Disney Co.’s KeyChest technology, which stores and records consumers’ purchases of digital movies on distant servers.
KeyChest is similar to UltraViolet, a digital locker system supported by a wider range of studios such as Warner Bros., 20th Century Fox, Universal, Sony and Paramount.
COPS: IRS WORKER TRIED BRIBES AFTER DRUNKEN ARREST: PITTSBURGH (AP) — Pittsburgh police say an Internal Revenue Service worker tried to bribe officers when they arrested him for being drunk and throwing steel crowd dividers, one of which knocked a woman unconscious, during a Steelers game.
Police say 29-year-old Stephen Sapp was screaming and cursing after he was asked to leave Sunday night’s game and that he threw the crowd dividers in “a dangerous, disorderly manner.”
Police say Sapp told officers: “Listen, I know how this works. How much money will it take to make this go away and to let me go home today?”
Online court records don’t list an attorney for the 29-year-old Pittsburgh man.
An IRS spokeswoman confirmed that Sapp is a furloughed employee and says the criminal charges could affect his employment status.