Shares of Express Script Holding Co. topped $60 for the first time in more than a year and were on track to set an all-time high closing price Wednesday, a day after the pharmacy benefits manager reported second-quarter results that trumped expectations. It also raised its 2012 forecast.
THE SPARK: The St. Louis company said Tuesday after markets closed that it recorded adjusted earnings of 88 cents per share in the three months that ended June 30, as generic drugs helped net income and the company saw better-than-expected savings from its acquisition of Medco Health Solutions.
Express Scripts also said it now expects 2012 earnings of $3.60 to $3.75 per share this year, up from its previous range of $3.36 to $3.66 per share. The company's second-quarter revenue more than doubled to $27.69 billion with the Medco acquisition.
Express Scripts shares started climbing Tuesday evening and continued to rise Wednesday before markets opened.
THE BIG PICUTRE: Express Scripts closed its purchase of fellow pharmacy benefits manager Medco Health Solutions in early April. The $29-billion deal, which was announced last summer, created a company big enough to handle the prescriptions of about 135 million people, or more than one in three Americans.
Pharmacy benefits managers run prescription drug plans for employers, insurers and other customers. They process mail-order prescriptions and handle bills for prescriptions filled at retail pharmacies. They use large purchasing power to negotiate lower drug prices and make money by reducing costs for health plan sponsors and members.
THE ANALYSIS: Express Scripts' adjusted earnings per share beat the average analyst forecast of 82 cents per share.
Jefferies analyst Arthur I. Henderson said in a research note he expected the share price to climb after the "impressive" 6-cent trumping of Wall Street expectations. He said Express Scripts and Medco had been working on integration plans for months before the deal closed, and that helped the acquisition pay off quickly.
SHARE ACTION: Up 8.6 percent, or $4.83, to $60.85 in afternoon trading and went as high as $60.88. The company's all-time highest closing price was $60.58, set in 2011.