UPDATE 2-Express Scripts meets Q3 estimate, shrs fall

* Q3 adjusted EPS 65 cents matches Wall Street Estimates

* Revenue $11.25 billion

* Sees 2011 adjusted EPS $3.15 to $3.25

* Shares fall 1.7 percent
(Adds analyst comment, forecast details, NetRx update, generic
usage, updates shares)

By Bill Berkrot

NEW YORK, Oct 27 (BestGrowthStock) – Pharmacy benefit manager
Express Scripts Inc (ESRX.O: ) on Wednesday reported third
quarter profit (Read more your timing to make a profit.) that matched Wall Street estimates and raised
only the low end of its full-year earnings forecast range, and
its shares fell.

The company also provided its first glimpse of 2011,
forecasting adjusted earnings per share of $3.15 to $3.25. Wall
Street consensus estimates call for $3.16 a share, according to
Thomson Reuters I/B/E/S.

For the full year 2010, Express now expects adjusted
earnings of $2.48 to $2.50 per share. It had previously
forecast $2.45 to $2.50 per share.

“I think there was probably some hope that they would beat
and raise by a little more,” Jeff Jonas, an analyst for Gabelli
and Co said of the after hours stock decline.

However, Jefferies & Co analyst Arthur Henderson said
investors will ultimately focus on the 2011 outlook and he
believes the stock will be up on Thursday.

“The key number here that everybody was looking for was the
2011 guidance and they put up a range that clearly exceeded
some expectations,” Henderson said.

“I’m actually quite pleased with where things are and I
think the guidance is conservative. We’ll see the stock
turnaround tomorrow,” he predicted.

The company posted earnings from from continuing operations
of $307.1 million, or 57 cents per share, compared with a
profit of $196.8 million, or 36 cents per share, a year ago.

Excluding items, Express earned 65 cents per share,
matching analysts’ average expectations, according to Thomson
Reuters I/B/E/S.

Revenue for the quarter was $11.25 billion, shy of Wall
Street estimates of $11.42 billion.

Pharmacy benefit managers, or PBMs, administer prescription
drug benefits for employers and health plans and operate large
mail-order pharmacies.

The St Louis-based company said it has now migrated more
than 90 percent of the NetRx membership to its systems, up from
50 percent in the previous quarter, and it expects the
migration to be complete by the end of this year.

Express last year purchased WellPoint Inc’s (WLP.N: ) NetRx
PBM business for $4.68 billion and has said it expects the
acquisition to generate more than $1 billion in annual earnings
once fully integrated.

Total adjusted claims for the quarter rose to 186.9 million
from 126.3 million.

Use of lower cost generic drugs, which carry a higher
profit margin than expensive branded medicines, rose to 72.1
percent from 68.3 percent a year ago.

For 2011 Express sees total adjusted claims of 750 million
to 780 million and cash flow from operations of $2.2 billion to
$2.4 billion.

The company said it repurchased 16.4 million shares for
$747.5 million during the quarter.

Express shares fell to $48.40 in extended trading from
their New York Stock Exchange close at $49.26.
(Reporting by Bill Berkrot; editing by Carol Bishopric)

UPDATE 2-Express Scripts meets Q3 estimate, shrs fall