WOONSOCKET, R.I. CVS posted on Thursday record revenues and earnings for the fourth quarter, bringing to a close a “milestone year for CVS Caremark” and setting the stage for “significant future growth,” according to Tom Ryan, chairman, president and chief executive officer.
“Solid revenue growth and improved gross margins in both the retail and PBM segments drove expanded operating margins and healthy earnings growth. We attained our goal of generating $2 billion in free cash flow, and launched a $5 billion share repurchase program, slated to be fully complete by the end of the first quarter of this year,” Ryan stated. “We also set the stage for significant future growth with the completion of our transformational merger. From this platform, we are creating a unique and differentiated position in the marketplace, which will enable us to reduce the costs and complexities of health care for payers and consumers, while improving health outcomes.”
Net earnings for the quarter ended Dec. 29, increased 95.3 percent to $815 million, or 55 cents per diluted share, compared with net earnings of $417.2 million, or 49 cents per diluted share, in the comparable 2006 period. Adjusted diluted earnings per share for the fourth quarter were 58 cents compared with 52 cents per share in the comparable 2006 period.
For the full year 2007, net earnings increased 92.6 percent to $2.6 billion, or $1.92 per diluted share, compared with net earnings of $1.4 billion or $1.60 per diluted share in 2006. Adjusted diluted earnings per share for the full year were $2.07, compared with $1.72 per share in the comparable 2006 period.
The company estimates merger and integration costs associated with the March 22, 2007 merger between CVS and Caremark Rx negatively impacted diluted earnings per share by approximately 1 cent and 5 cents for the fourth quarter and full year 2007, respectively.
Net revenues for the thirteen-week period increased $9.8 billion to $21.9 billion, up from $12.1 billion during the thirteen-week period ended Dec. 30, 2006. Same store sales rose 3.4 percent over the prior year period. Pharmacy same store sales rose 3.6 percent and were negatively impacted by approximately 450 basis points due to recent generic introductions, while front-end same store sales increased 2.9 percent.
For the full year, total revenue for the fifty-two week period ended Dec. 29, 2007, increased 74.2 percent to a record $76.3 billion, compared with $43.8 billion in 2006. Same-store sales in the CVS/pharmacy division increased 5.3 percent for the year, while pharmacy same store sales increased 5.2 percent and front-end same store sales increased 5.3 percent.
For the year, CVS Caremark opened 139 new retail pharmacy stores and one new specialty pharmacy store; closed 44 retail pharmacy stores, one mail service pharmacy and two specialty mail order pharmacies. In addition, the company relocated 136 retail pharmacy stores and one specialty pharmacy store. As of Dec. 29, the company operated 6,245 retail pharmacy stores, 56 specialty pharmacy stores, 20 specialty mail order pharmacies and nine mail order pharmacies in 44 states and the District of Columbia.