Caremark Expects to Report Record Earnings for Year

Benefiting from the continuing nationwide drive to cut health-care costs, Caremark Inc. said Thursday that it will report record revenues and net earnings for the fiscal year and three months ended June 30.

The Newport Beach-based provider of in-home care expects net earnings for its fiscal 1986 to total $10 million, up 31% from $7.6 million a year earlier, said Larry Watts, a company spokesman. Revenues for the year are expected to climb 61% to $134 million from $82.9 million in 1985. The fiscal 1985 revenue and earning figures have been restated to reflect the acquisition in March of a San Bernardino firm specializing in home care of hemophiliacs.

For the fourth-quarter of its fiscal 1986, Caremark expects to report net earnings of $2.8 million, up 21% from $2.3 million. Revenues for the quarter are expected to increase 56% to $40 million from $25.6 million.

As medical costs continue to mount, insurance companies, patients and others increasingly are turning to home care as an alternative to more expensive and sometimes unnecessary hospital care. Watts said Caremark should maintain its 30% growth rate in yearly earnings during its fiscal 1987.

In addition to providing in-home intravenous therapy, the company also has a mail-order pharmacy and a computer-based consulting service aimed at helping insurers cut their health-care costs, often by recommending in-home care. Together the pharmacy and consulting units accounted for about 18% of the fiscal 1986 revenues. Revenues for the two operations are expected to grow by 50% during the current fiscal year, Watts said.

The pharmacy lost money in fiscal 1986 while the Health Data Institute, as the consulting service is called, contributed “nothing significant” to earnings, Watts said. However, the pharmacy should be profitable by the end of 1987, he predicted.