CVS raises outlook after strong Q1

WOONSOCKET, R.I. — CVS Health easily topped analysts’ forecasts for revenue and earnings for the first quarter ended March 31.

The company posted adjusted earnings per share of $2.57, beating Wall Street’s projected $2.21.

Revenue of $100.4 billion was ahead of the consensus estimate of $95 bilion.

All of the company’s businesses, including Aetna, Caremark and its retail pharmacy and health services segment, beat analysts’ revenue expectations.

CVS raised its full-year outlook for adjusted EPS to between $7.30 and $7.50 per share from a previous guidance of $7 to $7.20.

Revenue for the year is now projected at $405 billion at minimum, up from the prior outlook of at least $400 billion.

Net income for the quarter was $2.96 billion, up 66% from the year-ago period. 

“CVS Health continues to provide what people want most from health care: a connected, convenient, cost-effective engagement experience across our unique collection of businesses,” said chairman and CEO David Joyner. “We build trust every day in communities across the country by providing better access, affordability and care to nearly 185 million people. Our positive performance is driven by strong execution across our enterprise. We will continue to build momentum through delivering on our strategy and a steadfast focus on our purpose — to simplify health care one person, one family and one community at a time.”

Total revenue for the quarter increased 6.2%, driven by growth across all operating segments. Aetna’s gain of about 3% was especially notable, given the struggles of insurers with increased medical expenses over the past year.

CVS’s operating income surged 38.7%, primarily due to increased adjusted operating income, as well as the absence of a $387 million legacy litigation charge and a $247 million pre-tax loss on the wind-down and sale of accountable care assets, both recorded in the prior year.

Adjusted operating income climbed 12.5%, primarily driven by a 52.6% gain in the Health Care Benefits segment (Aetna) to $3.0 billion.

Aetna’s revenue rose to $35.97 billion from $34.8 billion a year earlier.

Caremark’s revenue advanced 11% from $43.5 billion last year to $48.2 billion.