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WOONSOCKET, R.I. — CVS Health’s fourth quarter sales and earnings beat Wall Street’s expectations, as demand for COVID-19 tests and vaccines drove customers to stores.
Revenue for the three months ended December 31 jumped 10.1% from a year earlier to $76.6 billion, topping analysts’ projection of $75.67 billion. Adjusted earnings per share climbed 52% to $1.98, beating the projected $1.93.
CVS reported net income of $1.31 billion, or 99 cents per share, up from $973 million, or 74 cents per share, in the year-ago period.
For the full year, revenue rose 8.7% to $292.1 billion. GAAP diluted earnings per share from continuing operations were $5.95, while adjusted EPS was $8.40. CVS generated cash flow from operations of $18.3 billion, and net repayments of long-term debt totaled $8.8 billion.
The company maintained its fiscal 2022 outlook, predicting EPS of $7.04 to $7.24 and adjusted EPS of $8.10 to $8.30.
“We’re engaging millions of customers across our businesses and in our community health destinations, becoming an even bigger part of their everyday health. That’s clearly reflected in our performance, but more importantly in our potential,” said president and chief executive officer Karen Lynch.
CVS administered more than 8 million COVID-19 tests and more than 20 million COVID-19 vaccines in the quarter. For the full year, the company administered more than 32 million tests and more than 59 million vaccines.
Retail/LTC segment revenues increased 12.7% in the quarter to $27.1 billion, primarily driven by increased prescription and front-store volume, the administration of COVID-19 vaccinations and diagnostic testing, as well as brand inflation. These increases were partially offset by continued pharmacy reimbursement pressure and the impact of recent generic introductions.
COVID-19 vaccinations, diagnostic testing and over-the-counter test kit sales together contributed approximately 40% and 45%, respectively, of the increase in the segment’s revenues for the quarter and full year, compared to the prior year. The prior year reflected the ongoing expansion of the company’s diagnostic testing program, which began in April 2020; an immaterial impact from COVID-19 vaccinations, which began in December 2020; and no O-T-C test kit sales.
Adjusted operating income increased 38.4% for the quarter to $2.46 billion.
