Express Scripts Earns $1.33 per Share

For Q1, Express Scripts (ESRX) reported earnings of $1.33 per share. Wall Street had been expecting $1.32. Express had previously given a range of $1.30 to $1.34 per share.

The company is also raising its full-year guidance. The previous range was $6.82 to $7.02 per share. The new range is $6.90 to $7.04 per share.

For Q2, they’re looking for $1.70 to $1.74 per share. Wall Street was at $1.68 per share.

Express also updated their status with Anthem. It looks like the two may part ways at the end of 2019.

The Company’s current long-term PBM contract with Anthem expires on December 31, 2019, and Anthem is currently engaged in a Request for Proposal (RFP) process for a PBM service provider following the end of its contract with Express Scripts. While the Company has not formally participated in the RFP process, in recent months, management for the Company and Anthem have had several conversations in which the Company proposed providing as much as $1 billion in annual value ($3 billion in the aggregate) in the form of price concessions for 2017-2019 in connection with a negotiated contract extension for the period beyond 2019 at prevailing market rates. Although conversations have been ongoing, the Company was recently told by Anthem management that Anthem intends to move its business when the Company’s current contract with Anthem expires on December 31, 2019, and that Anthem is not interested in continuing discussions regarding pricing concessions for 2017-2019 or in receiving the Company’s proposed pricing for the period beyond 2019. As a result, today Express Scripts has elected to provide information as to its financial performance with and without Anthem, without any obligation to do so, in order to demonstrate that the Company’s core PBM business, excluding Anthem, is well positioned for future growth. See Appendix A for additional details regarding the Company’s relationship with Anthem and the history of the agreement between the parties.

“It is difficult for us to understand why Anthem has not recognized the potential value which could be brought forth by engaging in meaningful discussions regarding a mutually beneficial pricing arrangement for the remaining term of our contract and beyond,” said Tim Wentworth, President and CEO of Express Scripts.

The shares are down about 11% in the after-hours market.

Posted by on April 24th, 2017 at 4:41 pm


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