A customer exits a CVS Health Corp. store in Oakland, California, U.S., on Friday, Aug. 2, 2019.
Michael Short | Bloomberg | Getty Images
CVS Health on Wednesday reported second-quarter earnings and revenue that beat expectations, as the corporate slashes costs and lays off hundreds of employees.
CVS has implemented a cost-cutting program because it pushes deeper into health-care services within the wake of its $8 billion acquisition of Signify Health and its $10.6 billion purchase of Oak Street Health.
A part of that effort calls for cutting 5,000 jobs, CNBC reported Tuesday.
Here’s what CVS recorded for its second quarter compared with Wall Street’s expectations, based on a survey of analysts by Refinitiv:
- Earnings per share: $2.21 adjusted, vs. $2.11 expected
- Revenue: $88.9 billion, vs. $86.5 billion expected
The health-care giant posted net income of $1.91 billion for the quarter, or $1.48 per share, a 37% decline from the identical period in 2022 when CVS reported net income of $3.04 billion, or $2.29 per share. Excluding one-time items, CVS reported $2.21 per share for the period.
The corporate booked revenue of $88.9 billion for the quarter, a ten% increase compared with the year-ago period.
CVS maintained its full-year adjusted earnings guidance of $8.50 to $8.70 per share, after slashing its projections by 20 cents last quarter as a result of costs related to its recent acquisitions.
The corporate’s health services segment generated $46.22 billion in revenue, a 7.6% increase compared with the identical quarter in 2022. The division includes the pharmacy profit manager CVS Caremark and health-care services delivered in medical clinics, via telehealth and at home.
CVS’ retail pharmacy division generated $28.78 billion in sales, also 7.6% higher than the yr ago-period, driven by increased prescription volume. The variety of prescriptions filled rose 2.4% on a 30-day basis, excluding Covid-19 vaccinations. Same-store prescription volume jumped nearly 5%, excluding Covid vaccines.
The corporate’s medical health insurance segment generated $26.75 billion, a 17.6% increase over the second quarter of 2022. That division includes Aetna plans for the Inexpensive Care Act, Medicare Advantage, Medicaid, and dental and vision.
The insurance segment’s medical profit ratio — a measure of total medical expenses paid relative to premiums collected — rose to 86.2% within the quarter, compared with 82.7% within the year-ago period. A lower ratio typically indicates that the corporate collected more in premiums than it paid out in advantages, leading to higher profitability.
