NEW YORK CVS Caremark said Thursday its profit slipped 1 percent in the second quarter as its pharmacy benefits management business weathered lower prices on contract renewals.
The Woonsocket, R.I., company has ties to Nashville, where Caremark has operated the pharmacy benefits side of the dual purpose company. Its stock fell more than 6 percent on a bleak day on Wall Street, closing at $34, down $2.21 per share.
Now, CVS Caremark faces pressure to lower prices linked to its pharmacy benefits services even more.
That side of the business works with big groups to deliver drug prescriptions and handle other back-office chores online and through the mails.
Caremarks results also have been hurt by continued declines in prescription drug use, which mostly affect medications for chronic ailments.
Prescriptions have slumped since early 2010 because Americans have cut back on doctors visits and tried to make their prescriptions last longer. The company said it now expects a slightly bigger decline in Caremarks annual profit because of those cutbacks.
CVS Caremark Corp.s second-quarter profit declined to $816 million from $821 million a year ago. On a per-share basis it was unchanged at 60 cents. Excluding one-time items, the company earned 65 cents per share. Revenue rose 11 percent to $26.63 billion from $24.01 billion.
Analysts surveyed by FactSet expected a profit of 64 cents per share and revenue of $26.76 billion in revenue, on average.
During a conference call with analysts, the company said it has kept 98 percent of its clients whose contracts are up for renewal in 2012, and it expects $4.8 billion from new or expanded contracts with the federal employee program, with California government employees, and the state of Hawaii, among other clients.