Medco Health 3Q Profit Up 16 Percent

FRANKLIN LAKES — Medco Health Solutions, the nation's largest prescription benefit manager, said Thursday its net income rose nearly 16 percent in the third quarter and raised its outlook for the full year.

The rise in the July-September quarter reflected the early release of certain generic medications and strong mail-order volume.

Net income climbed to $214.7 million, or 78 cents per share, in the three months ended Sept. 29 from $185.8 million, or 62 cents per share, a year ago.

Excluding amortization costs, the company earned 88 cents per share in the latest quarter.

Revenue climbed 4 percent to $10.92 billion from $10.46 billion a year ago.

Analysts polled by Thomson Financial forecast profit of 79 cents per share on $11.09 billion in revenue.

The company purchased diabetes treatment company PolyMedica Corp. for $1.5 billion in cash during the quarter, to create one of the world's largest diabetes-care practices, serving nearly 4 million diabetic patients.

Medco raised its adjusted profit outlook for 2007 to a range of $3.55 to $3.60 per share from $3.50 to $3.55 previously, and forecast 2008 adjusted earnings of $4.29 to $4.41 per share.

Wall Street has predicted 2007 earnings per share of $3.56 and 2008 profit of $4.31 per share, excluding items.

"The unanticipated early introductions and overall higher utilization of generics, combined with our greater visibility through the end of the year, provides us with the confidence to again raise our 2007 earnings estimate," said JoAnn Reed, senior vice president and chief financial officer.

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