Earnings Reports for Aug. 1

ByABC News
August 3, 2000, 9:24 AM

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CVS Earnings Up 15%

CVS Corp. the biggest U.S. drug-store chain, said second-quarterearnings 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 byFirst 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. Thats what CVS investorswere looking for. CVS Chairman Tom Ryan said the company met its earnings goal, despite cool weather in the Northeast, which caused the the companys inventory of summermerchandise 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 operated4,082 stores. Ryan said CVS recent agreement to buy Bergen Brunswig Corp.s struggling speciality pharmacybusiness would prove a key factor in the companys 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 andexpensive 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 WallStreets reduced expectations.

In the quarter ended June 30, the Cincinnati-based maker ofCrest toothpaste and Folgers coffee earned $516 million, or 36cents a share, up from $414 million, or 29 cents per share, in theyear-ago quarter.