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CVS Caremark Earnings Preview Cheat Sheet
Wall St. Earnings Expectations: The average estimate of analysts is for net income of 79 cents per share, a rise of 21.5% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved up from 78 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 79 cents during the last month. Analysts are projecting profit to rise by 17.5% versus last year to $3.29.
Past Earnings Performance: The company topped forecasts last quarter after being in line with estimates the quarter prior. In the first quarter, it reported profit of 65 cents per share versus a mean estimate of 63 cents. Two quarters ago, it reported net income of 89 cents per share.
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Wall St. Revenue Expectations: On average, analysts predict $30.98 billion in revenue this quarter, a rise of 16.3% from the year-ago quarter. Analysts are forecasting total revenue of $122.78 billion for the year, a rise of 14.6% from last year’s revenue of $107.1 billion.
A Look Back: In the first quarter, profit rose 8.8% to $776 million (59 cents a share) from $713 million (52 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 19% to $30.8 billion from $25.88 billion.
Stock Price Performance: Between July 3, 2012 and August 1, 2012, the stock price dropped $2.99 (-6.3%), from $47.83 to $44.84. The stock price saw one of its best stretches over the last year between October 3, 2011 and October 14, 2011, when shares rose for 10 straight days, increasing 6.6% (+$2.16) over that span. It saw one of its worst periods between July 18, 2012 and July 25, 2012 when shares fell for six straight days, dropping 8.4% (-$4.07) over that span.
The company enters this earnings announcement with substantial revenue momentum. The company has averaged year-over-year revenue growth of 14% over the last four quarters.
This upcoming earnings announcement will be a chance to build on positive earnings momentum over the last three quarters. Net income rose 7.3% in the third quarter of the last fiscal year and 3.7% in the fourth quarter of the last fiscal year before increasing again in the first quarter.
Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.48 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 1.56 in the fourth quarter of the last fiscal year to the last quarter driven in part by an increase in liabilities. Current liabilities increased 12.2% to $13.41 billion while assets rose 7% to $19.89 billion.
Analyst Ratings: With 15 analysts rating the stock a buy, none rating it a sell and three rating the stock a hold, there are indications of a bullish stance by analysts.
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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)
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