“The year began inauspiciously for pharmacy-benefits managerExpress Scripts. First-quarter earnings were lighter than expected as fewer claims for prescriptions were submitted, partly because Wal-Mart Stores (ticker: WMT) no longer was among Express Scripts’ roster of clients. Profit as a percentage of each claim also fell short of expectations, and growth from existing health-plan sponsors and clients didn’t materialize as new hires failed to offset attrition, resulting in a lack of net new members.
Yet all isn’t doom and gloom for the St. Louis-based company. Far from it. First-quarter earnings were up a solid 20% from the prior year, as savvy expense management offset the shortfall in script volume. The rest of the year is looking much brighter, particularly the second half, when a raft of favorable developments is likely to strengthen the outlook for Express Scripts, a company with $45 billion in annual sales and a long history of producing steady and strong growth in earnings and cash flow.”
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