WOONSOCKET, R.I. — Early results in 2012 show CVS Caremark Corp. reaping more benefit than expected from the dispute between rival Walgreen Co. and Express Scripts Inc. Consequently, CVS management has increased its earnings guidance for the first quarter and full 2012 fiscal year.

Early results in 2012 show CVS Caremark Corp. reaping more benefit than expected from the dispute between rival Walgreen Co. and Express Scripts Inc. Consequently, CVS management has increased its earnings guidance for the first quarter and full 2012 fiscal year.

During a fourth quarter conference call with analysts CVS president and chief executive officer Larry Merlo explained that the Walgreens-Express Scripts impasse had no material impact on the company’s fiscal 2011 results, although the effects began to be felt in the fourth quarter, which ended December 31, 2011.

"Now, since the start of this year, we are seeing a significant number of transfers from Walgreens into CVS," he went on. "In fact, the amount is a bit more than we anticipated."

CVS’ pharmacy teams have been focusing on providing Express Scripts members with uninterrupted pharmacy care access, and the chain has invested in store labor and marketing to capitalize on what Merlo termed a significant opportunity.

"Based on early results, we believe we are gaining more than our fair share of this business," he added. "And in light of this, we are now projecting that earnings per share will benefit by approximately 3 cents per share in the first quarter should the situation remain unresolved for the duration of the quarter."

In addition, CVS is increasing its full-year earnings guidance to a range of $3.18 to $3.28 per share, while first quarter adjusted earnings are expected to be between 61 cents and 63 cents per share. Analysts surveyed by Thomson Reuters have been expecting 61 cents per share for the quarter and $3.25 for the year, on average.

Merlo cautioned that CVS is not changing its guidance for the second, third or fourth quarters since Walgreens and Express Scripts could reach an agreement at any time.

Total first quarter revenues are expected to increase 17% to 18.5%, while retail sales are projected to rise 8% to 9%, including an increase in same-store sales of 6.5% to 7.5%. Same-store prescription counts are expected to improve by 5.5% to 6.5%.

Chief financial officer David Denton told analysts that most of the increase is expected to come from the script transfers from Walgreens, but it will include the impact of drug price inflation.

Adjusted earnings per share for fiscal 2011 grew 5.9% to $2.80 per share, while fourth quarter adjusted earnings were 89 cents per share, in line with analysts’ forecast.

The good news from CVS came on the heels of a sobering January sales report from Walgreens, which saw prescription sales in comparable stores fall 7.9% as prescription counts decreased 8.6%. Walgreens management announced that it now expects total prescriptions filled for 2012 to be near the low end of its previously announced range of 97% to 99% of the 2011 total. The revision also takes into account a much weaker than expected flu season.

For its part, Walgreens continues its efforts to offset the loss of its Express Scripts business. The chain recently agreed to acquire the prescription files and inventory from 33 Kmart pharmacies in 16 states.

In addition, it has relaunched its weekly ad circular with a digital offering that includes hundreds of additional items available through Walgreens.com. The print version of the circular has also received a makeover, which Joe Magnacca, president of daily living products and solutions, said is the most dramatic revamp of the circular in more than 20 years.