CVS Q4 Tops Street; Revenue Up 4.2%
CVS Health Corp. reported better-than-expected fourth-quarter earnings and revenue even as ongoing cost pressure in its insurance business took a toll on earnings.
Net income fell to $1.64 billion, or $1.30 a share, for the quarter ended Dec. 31, from $2.05 billion, or $1.58 a share, in the year-ago period. Adjusted earnings per share fell to $1.19 from $2.12 but were ahead of analysts’ estimates of $0.91.
Total revenue rose 4.2% to $97.71 billion, beating estimates of $97.09 billion.
By division, revenue in the pharmacy and consumer-wellness unit rose 7.5% to $33.51 billion, with the increase primarily driven a more favorable pharmacy drug mix and increased prescription volume. Prescriptions filled rose 3.3%.
Health services revenue declined 4.3% to $47.02 billion. It was the fourth consecutive quarter of declines.
Revenue in the health care benefits segment (CVS’ insurance business) soared 23.3% to $32.96 billion. But the business reported an adjusted operating loss of $439 million (from a profit of $676 million in the year-ago quarter), driven by higher medical costs and unfavorable results in Medicare Advantage’s Star Ratings for the 2024 payment year, among other factors.
"We have continued to see growth in key areas of our business, including the pharmacy and consumer wellness segment, while we address the industry-wide challenges that have impacted our health care benefits segment,” said David Joyner, who was named president and CEO of CVS in October. “Through the continued dedication of our colleagues, we will be positioned for strong performance in 2025 as we deliver simply better care for consumers while improving outcomes and reducing costs."
CVS said it expects full-year adjusted earnings in a range of $5.75 to $6 per share. Analysts expect $5.86 per share.
As of Dec. 31, 2024, CVS had more than 9,000 retail pharmacy locations, more than 1,000 walk-in and primary care medical clinics, a leading pharmacy benefits manager with approximately 90 million plan members, and a dedicated senior pharmacy care business serving more than 800,000 patients per year.
This article was originally covered by sister publication Chain Store Age.
