FRANKLIN LAKES, N.J. (Reuters)—Medco Health Solutions Inc.'s quarterly profit rose 11% on increases of generic drugs delivered by mail order, but its shares fell as nothing in the report generated excitement about the stock.

The U.S. pharmacy benefit manager reported a fourth-quarter profit, excluding special items, that matched Wall Street's target and it backed its 2011 forecast.

Its shares fell 2.4% in morning trading.

"It's an in-line quarter, and reiterated guidance is not anything that is going to support the multiple that this stock has been trading of as of late," Jefferies & Co. analyst Art Henderson said, noting the shares are trading at more than 15 times 2011 earnings estimates.

Medco also faces concerns over the fate of its biggest account—with health insurer UnitedHealth Group Inc.—and Medco executives said the company may not resolve the future of the contract until 2012.

For the quarter, net income rose to $378.5 million, or 88 cents per share, from $341.5 million, or 70 cents per share, a year earlier.

Excluding items, earnings of 94 cents per share was in line with the average estimate of analysts, according to Thomson Reuters I/B/E/S.

Revenue rose 11% to $16.93 billion.

Pharmacy benefit managers, or PBMs, administer drug benefits for employers and health plans.

Generic drugs—copies of brand-name medicines that have lost patent protection—are especially profitable for PBMs, especially those delivered through their extensive mail-order pharmacies.

Medco's total prescription volume rose 7.4% to 244.3 million. Its generic mail-order prescription volume increased 15% to a record 17.5 million.

Medco is expecting to see relatively little benefit in 2011 from introductions of generic drugs until the end of the year, when U.S. generic versions of Pfizer's Lipitor cholesterol drug hit the market.

Fueled by Lipitor and launches of generic versions of several other top-selling medicines, 2012 is expected to be a huge year for generic contributions for Medco.

"There's nothing to get really excited about until later on in the year when you start to see generic Lipitor hitting," Mr. Henderson said.

Revenue in Medco's specialty-drug division, which includes medicines for cancer, multiple sclerosis and rheumatoid arthritis, rose 21% to nearly $3 billion.

Medco was still looking for 2011 earnings, excluding items, of $3.99 to $4.12 per share, an increase of 12% to 16% over 2010.

Medco rival Express Scripts Inc. last week reported a slightly better-than-expected fourth-quarter profit but may have disappointed some investors by maintaining its 2011 earnings forecast.

Medco in November outlined a goal of earnings-per-share growth of 16% to 20% a year on average over the next decade in a plan that involves controlling the booming spending on specialty medicines and consistent contributions from generic drugs.

Medco shares were down $1.57 at $63.21 in morning trading on the New York Stock Exchange.