Pharmacy benefits manager Express Scripts said Thursday its first-quarter profit fell 18 percent as it worked to close its $29 billion acquisition of competitor Medco.
The St. Louis company earned $267.8 million, or 55 cents per share, down from $326.5 million, or 61 cents per share, in last year's first quarter. Excluding transaction-related costs and other one-time items, it earned 73 cents per share. Revenue climbed 9 percent to $12.13 billion. It filled 192.8 million adjusted prescriptions, up 3.6 percent from a year ago. Adjusted prescriptions is a figure that treats 90-day mail order prescriptions as three regular 30-day prescriptions.
Analysts forecast higher earnings of 77 cents per share, according to FactSet, but revenue beat the average estimate of $11.47 billion.
Express Scripts Holding Co. completed its acquisition of Medco Health Solutions on April 2. The deal made Express Scripts the largest pharmacy benefits manager by far. PBMs run prescription drug plans for employers, insurers and other customers. They process mail-order prescriptions and handle bills for prescriptions filled at retail pharmacies, acting as middlemen between employers offering prescription drug benefits and drugmakers. They use large purchasing power to negotiate lower drug prices and make money by reducing costs for health plan sponsors and members.
Looking ahead, Express Scripts expects the combined company to earn $3.36 to $3.66 per share in 2012, while filling 1.4 billion adjusted prescriptions.
Analysts are expecting a profit of $3.58 per share, on average.
Express Scripts said the deal should add "slightly" to its profit while it integrates Medco and forecast a moderate increase in its profit after that process is finished in the first half of 2014. The company expects to create $1 billion in annual savings after it fully integrates Medco into its business.
The company said Medco's first-quarter profit fell about 26 percent to $245.1 million, or 62 cents per share. Excluding transaction and amortization costs, it said Medco earned 79 cents per share.
Express Scripts shares rose 44 cents to $54.34 Thursday. The stock slid 44 cents to $53.90 in after-hours trading.