Express Scripts Holding Co. (ESRX) reported a 27% jump in earnings for the third quarter helped by strong client retention and higher interest from prospects in the pharmacy and healthcare solutions. The bottom line came in line with analysts’ expectations, while the top line exceeded consensus estimates.
Net income climbed 27% year-over-year to $1.07 billion or $1.89 per share. Adjusted EPS increased to $2.43 from $1.90 a year ago.
Revenues rose 3.6% to $25.6 billion. Core business adjusted EBITDA increased 4.1% to $1.39 billion, helped by product upsells and supply chain initiatives, including the performance of its SafeguardRx suite of solutions as well as contributions from eviCore and Accredo.
Total adjusted claims fell 2.6% to 334.6 million due primarily to the previously disclosed losses of certain public sector clients in the core business.
The company now expects its 2019 retention rate for the 2018 selling season to exceed 98%, an all-time high for the company. Express Scripts is retaining its clients, winning prospects, and enrolling clients in more solutions and, as a result, expects to grow core business adjusted claims by 2% to 3% in 2019.
On March 8, 2018, the company entered into an Agreement and Plan of Merger with Cigna Corporation (CI) whereby Cigna will acquire Express Scripts in a cash and stock transaction. On August 24, at its special meeting, Express Scripts’ stockholders approved the adoption of the Merger Agreement. On September 17, the U.S. Department of Justice cleared the proposed merger with Cigna. The merger is expected to be completed by December 31, 2018.
Due to the company’s pending acquisition by Cigna, Express Scripts will not be holding a third-quarter conference call to review results, and will no longer provide financial guidance.
Shares of Express Scripts ended Wednesday’s regular session up 1.62% at $96.97 on the Nasdaq.