WOONSOCKET, R.I. — Propelled by gains across its businesses, CVS Health topped Wall Street’s projections for fourth quarter sales and earnings, and reaffirmed its full year profit outlook.
The company’s adjusted earnings per share of $1.09 exceeded analysts’ estimated 99 cents per share, while its revenue of $105.69 billion beat the forecast of $103.59 billion.
“Our fourth quarter and full-year results demonstrate the progress we are making in transforming the health care experience with our unique collection of businesses,” said President and CEO David Joyner. “From lowering drug prices, to improving navigation of health care, to being the front door of care across our country, we are well positioned to achieve our ambition to be the most trusted health care company in America.”
CVS Pharmacy successfully completed the transition to cost-based reimbursement across its commercial, third-party discount, Medicare and Medicaid businesses.
Aetna continues to improve the experience for health care professionals and their patients by approving more than 95% of all eligible prior authorizations within 24 hours, with many completed instantly.
Caremark closed out 2025 with significant customer wins and strong retention, providing momentum into this year.
For all of 2026, CVS confirmed its adjusted EPS guidance range of $7.00 to $7.20.
Fourth quarter GAAP diluted EPS of $2.30 increased from $1.30 in the prior year. The adjusted EPS of $1.09 decreased from $1.19 in the prior year, primarily due to a decline in adjusted operating income in the Health Care Benefits segment, reflecting changes in the seasonality of the Medicare Part D program due to the impact of the Inflation Reduction Act.
Total revenues increased 8.2% in the quarter and 7.8% in the year ended December 31, driven by growth across all operating segments.
Operating income decreased 10.8% in the quarter, primarily due to a decrease in adjusted operating income and a decline in net realized capital gains compared to the prior year.
Operating income decreased 45.3% for the year, primarily due to a $5.7 billion goodwill impairment charge related to the Health Care Delivery reporting unit and approximately $1.2 billion of legacy litigation charges. These decreases were partially offset by an increase in adjusted operating income and the absence of approximately $1.2 billion of restructuring charges recorded in the prior year.
Adjusted operating income decreased 4.8% in the quarter and increased 20.6% for the year.
Interest expense increased $29 million, or 3.8%, and $161 million, or 5.4%, respectively, primarily as a result of long-term debt issuances in December 2024 and August 2025.
The company recorded an income tax benefit at an effective income tax rate of (115.9)% in the fourth quarter, compared to income tax expense at an effective income tax rate of 23.7% in the prior year. The change resulted from a worthless stock deduction related to a subsidiary that filed for bankruptcy in 2025.
The effective income tax rate for the full year decreased to 19.1% compared to 25.4% in the prior year due to the worthless stock deduction, partially offset by the impact of the goodwill impairment charge and the legacy litigation charges recorded during 2025, both of which were not deductible for income tax purposes.
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