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The
drugstore chain and pharmacy benefits manager earned $1.64
billion, or $1.30 per share for the period ended Dec. 31. A year
earlier the company earned $2.05 billion, or $1.58 per share.
Removing one time costs and benefits, earnings were $1.19 per
share, easily topping the 89 cents per share that analysts
surveyed by Zacks Investment Research predicted.
Shares climbed more than 11% before the market opened Wednesday.
While the profit blew past expectations, it was short of the
same period last year, which CVS blamed on increased medical
costs in its insurance division, and lower Medicare Advantage
star ratings for the 2024 payment year.
CVS Health Corp., based in Woonsocket, Rhode Island, runs one of
the nation’s largest drugstore chains and a huge pharmacy
benefit management business that operates prescription drug
coverage for employers, insurers and other big clients. It also
covers nearly 27 million people through its Aetna insurance arm.
The health care giant has been hurt by pressure from the
Medicaid coverage it manages in several states as well as rising
costs from its Medicare Advantage business, which involves
privately run versions of the federal government’s coverage
program mainly for people age 65 and older.
On the drugstore side, CVS Health is wrapping up a multi-year
plan that includes the closure of more than 1,100 stores.
Quarterly revenue totaled $97.71 billion. That beat the $97.06
billion Wall Street was calling for.
Looking ahead, CVS Health foresees full-year adjusted earnings
in a range of $5.75 to $6 per share. Analysts polled by FactSet
expect $5.86 per share.
CVS Health is trying to move past a rough 2024 in which the
company cut its forecast several times and saw its stock price
tumble about 43%.
Former CEO Karen Lynch stepped down last October and was
replaced by company executive David Joyner.
About a month later, the company added four new board members.
They included the CEO of shareholder Glenview Capital
Management, a hedge fund that has criticized the company for
operating below its potential.
Glenview holds about 1% of the company’s outstanding shares,
according to FactSet.
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