Boston, MA 04/30/2014 (wallstreetpr) – Express Scripts Holding Company (NASDAQ:ESRX), a $55 billion pharmacy benefits manager (PBM), reported Q12014 that turned off Wall Street. Decline in profit does not come as good news for investors and as usual shares end up taking a rally to the south.
But for the case of Express Script, bad news was not just limited to a decline in profit. Instead, the company also adjusted its fiscal 2014 outlook downwards. That move also weighed heavily on the shares.
However, while everything around the company seemed to be falling apart especially looking at the shares, there is one thing that has firmly stood its ground, and that is hope.
Hope remains alive in Express Script that bad things for the company will not last. In any case, no situation is ever permanent. As such, the company expects 2015 to be a much better year as market conditions improve.
In Q12014, performance was clearly impacted by the harsh winter weather that limited operations. Furthermore, the slow roll out of the new insurance exchanges failed to support performance in the latest quarter. However, with the weather issue now out of the way and more people succeeding with the public insurance exchanges enrollment, the company expects the future to be bright.
Even as Express Scripts Holding Company (NASDAQ:ESRX) pursues growth, its acquisition might slow down as the company seems keen to pursue organic growth, at least according to Chairman and CEO George Paz. The executive said the company intends to spend 2014 focusing on technology and operations integration towards pivoting resources for growth outside acquisition.
Acquisition
In 2012, the company put $29.1 billion to acquire Medco, its fellow pharmacy benefits company. The acquisition significantly increased the capacity of the company, making the largest PBM in the U.S. It is that capacity that Express Scripts Holding Company (NASDAQ:ESRX) is banking on when it says the central idea is about achieving organic growth.
In any case, the company is well-positioned to benefit from a robust healthcare industry that is expected in the coming years under the new public insurance program.
Q12014 earnings in brief
Express Scripts Holding Company (NASDAQ:ESRX) reported Q12014 net profit of $328 million, meaning to 42 cents per share. That compared with $373 million or 45 cents per share in the corresponding quarter last year. Revenue also dropped 8.8 percent to $23.68 billion. Wall Street expected EPS of $1.01 on revenue of $23.83 billion.
