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CVS Beats Analyst Estimate Despite Front End Comp Slip

For second quarter, ended June 30, CVS Caremark Corp. announced that net income reached $1.25 billion, or $1.06 per diluted share, up from $1.12 billion, or 91 cents per diluted share, in the period a year earlier. Adjusted earnings per share for the quarter were $1.13 versus 97 cents in the year-prior period, according to the company.

The Zacks Consensus Estimate of financial analyst predictions called for second quarter adjusted earnings per share of $1.10.

Comparable store sales advanced 3.3% versus the second quarter of last year, CVS stated, with pharmacy comps up 5% and front end comps, including those for general merchandise such as home goods, down 0.4%. The company asserted that second quarter front end comps gained about 80 basis points from the shift of the Easter holiday from March in 2013 to April in 2014 but slipped due to softer customer traffic, partially offset by an increase in basket size. Tobacco sales and the CVS program to end them also had an impact on comps.

Second quarter net revenues increased 10.7% to $34.6 billion compared to the three months ended June 30, 2013, the company maintained.

“I’m extremely pleased with our strong performance this quarter,” Larry Merlo, CVS president and CEO, said in announcing financial results, “With adjusted EPS increasing 16.5%, we came in two cents above the high end of our expectations. Additionally, we have generated significant free cash flow through the first half of this year.”