CVS Caremark Corp. posted a 10% rise in its fourth-quarter earnings as the sales at its drugstores increased and it began to attract more business to its pharmacy benefits management unit.

The earnings rose to $1.05 billion, or 74 cents per share, during the fourth quarter from $949 million, or 65 cents per share, the previous year.

The revenue increased by 7% to $25.8 billion, including a 4.5% gain at the retail business on a solid 4.9% increase in same-store sales.

As CVS lost a net $4.8 billion in 2010 contracts, its pharmacy benefits segment has been under scrutiny, since late last year. At that time, CVS also feared that Caremark's operating profit could decline by 10% to 12%, in 2010. It rose by just 3% in the fourth quarter on falling margins.

The Pharmacy same-store sales rose by 7.3%, with generic drug introductions reducing the growth by 2.9 %. The 'front of the store' sales edged rose by 0.3%. The company said the generic dispensing rate increased from 2.2 % to 68.9%.