Investopedia: Medco Looks To Stay In The Pink

Medco Health Solutions (NYSE:MHS) is part of the oddball contingent of the healthcare spectrum. While many investors reflexively think of healthcare as a sector with high margins and proprietary products, the pharmacy benefit management space is the opposite - a low-margin business that relies on contracts and scale rather than innovative new products. Nevertheless, Medco has carved out a sizable market presence and delivered solid returns on capital, even if some investors are still quite worried about upcoming contract expirations.

The Quarter That Was
Medco delivered a solid end to the year. Revenue climbed more than 11% this quarter, surpassing even the high end of the analyst range of estimates. Revenue was boosted by 21% growth in the specialty pharmacy business and solid prescription volume growth of 7.4%.

Looking at some additional details, the company's mail-order value grew by 7.3%, with generic mail-orders up over 15%. With this quarter, generic penetration exceeded 72%, while mail penetration more or less stayed put around 34%.

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