Express Scripts Holding Company (NASDAQ:ESRX) rose 6.6%, the most in six months, on higher than expected profit forecast. Express Scripts Holding Company (NASDAQ:ESRX) gave 2013 guidance range of $4.20 to $4.30, versus consensus. Guidance for a share count of 825-835M implies at least a modest buyback in 2013.The guidance should help address some of the uncertainty that was weighing on shares in recent months.

Express Scripts

Implied EBITDA per adj. Rx of $4.45-$4.57 beat consensus forecasts. Key growth drivers embedded in guidance include improvement in COGS and SG&A spend offset by UNH, and selling season related attrition. Revenue of $27.4B and adjusted EPS of $1.05 compares to consensus of $27.2B and $1.04. Adjusted GM of 8.6%. Adjusted claims came in at 411 million. EBITDA/ Rx of $4.01 fell below consensus of $4.06, which is likely due to higher SG&A.

Revenues more than doubled with the Medco contribution, and were slightly ahead of plan, primarily on a higher revenue per script. Total adj. prescriptions rose 111%. The gross margin surged 114 bps yoy (52 bps above plan) on higher generic substitution (+500 bps), but higher administrative spending was partially offsetting. All in, the EBITDA margin rose 17 bps, 19 bps ahead of plan. Cash flow of $2.7 million facilitated another $1.2 billion in deleveraging, bringing its gross-debt-to-LTM-EBITDA ratio to 2.9x, approaching its target ratio of 2.0x. Cash on the balance sheet rose $1.5 billion sequentially to $2.8 billion.

On the conference call, Jeff Hall – Express Scripts Holding Company (NASDAQ:ESRX) – CFO discussed some of the guidance numbers, noting:

This strong year positions us well for 2013. We expect to achieve 2013 earnings per share in a range of $4.20 to $4.30, which represents growth of 12% to 15% over 2012. Adjusted claims are expected to increase approximately 5% to 7% over 2012. This increase in claims reflect the additional quarter of claims from Medco, new business wins, utilization of 0% to 1%, and these increases are partially offset by the roll off of approximately half of the United claims during 2013. SG&A in the year is expected to decline approximately 8% to 10%, resulting from the realization of additional synergies, lower management incentive compensation, and the sale of our Liberty business in December of 2012. Both gross profit and SG&A for Liberty were approximately $135 million in 2012. These decreases were partially offset by adding an additional quarter of Medco. EBITDA per Rx will increase 15% to 18% over 2012.

At the time of this writing, shares of Express Scripts Holding Company (NASDAQ:ESRX) are currently up 1.84% to $56.59 a share.