CVS profit drops in Q1

Woonsocket, R.I. CVS Caremark Corp. announced that charges and higher costs outweighed a boost in the company’s pharmacy sales, pushing first-quarter profit down slightly.

CVS said revenue from both prescriptions and discretionary items increased.

The company said its Maintenance Choice program, which allows health-plan members to pick up 90-day orders at drug stores at low, mail-order prices, has “really taken off,” leading to greater sales at drug stores.

The company earned $738.4 million, down from $745 million a year prior. Revenue rose 10% to $23.39 billion, from $21.33 billion.

CVS said sales from pharmacy services and retail pharmacies rose despite one less reporting day during the quarter. Revenue was also helped by the acquisition of 529 Longs Drugs stores. CVS said those stores added about $1.2 billion in revenue, and the integration of the Longs stores into CVS’ business has been going well.

Pharmacy-benefit network revenue at CVS rose 6.8%, while mail-order service revenue rose 8.4%. CVS acquired the pharmacy-benefits-management business RxAmerica when it bought Longs.

Pharmacy services revenue rose 7.2% to $11.5 billion during the quarter, while retail network claims processed rose 4.4%, primarily because of the addition of RxAmerica.

The retail segment gained 13.9% to reach $13.5 billion in revenue, with same-store sales rising 3.3%.

As of March 31, CVS operated 6,912 stores, 52 specialty pharmacy stores, 20 specialty mail-order pharmacies and six mail-order pharmacies in 43 states, the District of Columbia and Puerto Rico.