Top executives of CVS Caremark Corp. said yesterday the company's acquisition of Longs Drug Stores Corp. is exceeding expectations as efforts continue to integrate the two operations.

CVS last October acquired 521 Longs stores in four western states, including 39 in Hawai'i. CVS changed the names of the Longs stores to CVS in all markets except for Hawai'i, citing the 54-year relationship Longs has had with Hawai'i consumers as the dominant drugstore chain in the market.

The Longs acquisition has helped bolster CVS' standing as the dominant U.S. drugstore chain, and the initial integration costs have been lower than expected, said Thomas Ryan, CVS president and chief executive officer.

"I'm happy to say that Longs is exceeding our expectations in terms of both sales and margins, so it will probably be less dilutive this year than we originally thought," Ryan said during a conference call with investors.

David Rickard, CVS chief financial officer, said Longs contributed about $1.1 billion to the overall growth in the company's drug store business during the April-to-June quarter.

Rhode Island-based CVS closed the California-based corporate office of Longs in July, Ryan said. "We've also remodeled about a third of the continental U.S. stores to the look and feel of CVS, and we'll complete all the planned resets and remodels by mid-October," he said.

Ryan also said CVS reported strong sales in the second quarter "despite the soft economy."

CVS' profits rose 15 percent on increased revenue at its benefits-management business.

Net income climbed to $886.5 million, or 60 cents a share, from $771.2 million, or 53 cents, a year earlier. Sales increased 18 percent to $24.9 billion.

CVS negotiated lower contract prices at its Caremark pharmacy-benefits management business to lock in customers and attract new clients.

CVS shares fell 2 cents to close at $33.98 yesterday on the New York Stock Exchange. The shares are up about 18 percent so far this year.