CVS Earnings Up 15%
CVS Corp. the biggest U.S. drug-store chain, said second-quarter earnings rose 15 percent, meeting analysts’ estimates, on strong sales of allergy medicines, new drugs and one-hour photo services.
Woonsocket, R.I.-based CVS said earnings rose to $186.5 million, or 46 cents a share, from $162.6 million, or 40 cents, in the year-ago quarter. Analysts surveyed by First Call/Thomson Financial on average had expected earnings of 46 cents a share.
‘‘It was a solid quarter,’’ said John Murphy, an analyst at CS First Boston. ‘‘The key is that operating cash flow improved in the quarter. That’s what CVS investors were looking for.’’ CVS Chairman Tom Ryan said the company met its earnings goal, despite cool weather in the Northeast, which caused the the company’s inventory of summer merchandise to swell. Pharmacy sales were 62 percent of total sales. Sales in stores open at least a year increased 12 percent. CVS said it opened 33 new stores and relocated 55 others during the second quarter. As of July 1, it operated 4,082 stores. Ryan said CVS’ recent agreement to buy Bergen Brunswig Corp.’s struggling speciality pharmacy business would prove a key factor in the company’s growth.
He said the integration of the new business into CVS’ ProCare division would help create a $3 billion enterprise in four years. ProCare was created to support complex and expensive drug therapies for conditions such as HIV/AIDS, cancer and organ and bone-marrow transplants.
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Procter & Gamble Meets Expectations
Procter & Gamble Co. said fourth-quarter net earnings were up 25 percent, in line with Wall Street’s reduced expectations.
In the quarter ended June 30, the Cincinnati-based maker of Crest toothpaste and Folger’s coffee earned $516 million, or 36 cents a share, up from $414 million, or 29 cents per share, in the year-ago quarter.
Excluding an after-tax restructuring charge of $261 million, the company earned $777 million, or 55 cents a share, off 3 percent from $799, or 58 cents per share the previous year. Analysts surveyed by First Call/Thomson Financial revised their estimates downward to 55 cents last month after the company, which initially said fourth-quarter earnings would increase 15 percent to 17 percent, said it would not meet those expectations.
Sales for the consumer products giant were up 2 percent to $9.66 billion, compared with $9.45 billion a year ago.
The earnings report was the first from P&G since former top executive Durk I. Jager retired abruptly in June and John E. Pepper returned as chairman and Alan G. Lafley took over as president and CEO.
“While core earnings were above a year ago, P&G is capable of delivering better profit results, and we will,” Lafley said. “Our plan is to focus on big, leadership brands, big markets and big customers; smarter, more effective and efficient commercialization of innovation; and better cost control and cash management.”
P&G sells about 300 brands of food, beverage, paper, beauty care and drug products. Some of its best-known brands include Tide detergent, Charmin tissue and Pampers disposable diapers.
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Wendy’s Reports Earnings Growth