A CVS location in Recent York, US, on Thursday, Feb. 9, 2023.
Stephanie Keith | Bloomberg | Getty Images
CVS Health on Wednesday reported first-quarter results that beat earnings and revenue expectations, but the corporate lowered its full-year profit guidance attributable to costs related to recent acquisitions.
Shares fell greater than 1% in premarket trading Wednesday.
Here’s what CVS reported compared with Wall Street’s expectations, based on a survey of analysts by Refinitiv:
- Earnings per share: $2.20 adjusted, vs. $2.09 expected
- Revenue: $85.28 billion, vs. $80.81 billion expected
For the quarter ended March 31, CVS posted profit of $2.14 billion, or $1.65 a share, compared with $2.35 billion, or $1.77 a share, a 12 months earlier. Excluding one-time items, the corporate reported earnings of $2.20 per share for the period.
CVS reported total revenues of $85.28 billion, an 11% increase over the $76.83 billion reported in the primary quarter of 2022.
CVS lowered its 2023 adjusted earnings guidance to a spread of $8.50 to $8.70, which is 20 cents lower than its previous projection of $8.70 to $8.90.
The corporate lowered its guidance attributable to costs related to its $8 billion acquisition of Signify Health and its $10.6 billion purchase of Oak Street Health, amongst other items.
CVS’ health services segment booked revenue of $44.59 billion, a 12.6% increase over sales of $39.62 billion in the identical quarter last 12 months. The division includes its pharmacy profit manager CVS Caremark and health-care services delivered in medical clinics, through telehealth and at home.
Pharmacy claims processed on this division increased 3.7% in comparison with first quarter 2022 due partly to an elevated cough, cold and flu season.
CVS’ medical health insurance segment generated revenues of $25.88 billion, a 12% increase over sales of $23.09 billion in the identical quarter last 12 months.
The division includes Aetna Reasonably priced Care Act, Medicare Advantage, Medicaid and dental and vision plans. Total membership in these plans increased by 1.1 million to 25.5 million.
The insurance policy’ medical profit ratio increased 1.2% to 84.6%. This ratio is a measure of total medical expenses paid relative to premiums collected. A lower ratio typically indicates that the corporate collected more in premiums than it paid out in advantages, leading to higher profitability.
And CVS’ retail segment booked revenues of $27.92 billion, and increase of seven.8% in comparison with sales of $25.89 billion in the primary quarter of 2022. The division includes prescriptions disbursed in its 9,900 brick-and-mortar drug stores, infusion services, testing and vaccine administration.
Prescriptions filled increased 2.5% in comparison with the identical period last 12 months, again due partly to the elevated cough, flu and cold season. The rise was offset in party by a decline in Covid vaccination. Excluding this, prescriptions filled increased 4.5%.
It is a developing story. Please check back for updates.
