The customer walks to the entrance to the CVS Health Corp store. in downtown Los Angeles, California, USA, on Friday, October 27, 2017.
Christopher Lee | Bloomberg | Getty Images
CVS Health Wednesday exceeded fiscal third-quarter earnings expectations and raised its full-year outlook as it gained momentum from increased prescriptions and Covid-19 vaccinations.
The pharmacy chain and insurance company said they now expect adjusted earnings per share to be between $ 7.90 and $ 8.00 by 2021, up from $ 7.70 to $ 7.80.
However, the company was weighed down by several costs, including the integration costs associated with the acquisition of Aetna and the goodwill impairment costs associated with its long-term care business. Its pre-adjustment earnings per share forecast was downgraded to $ 6.13-6.23 from $ 6.35 to $ 6.45 earlier.
The company’s shares fell by about 1% in the premarket.
Here is what the company reported for the three-month period ending September 30, compared to what analysts expected, based on an analyst survey conducted by Refinitiv:
- Earnings per share: USD 1.97 adjusted against expected USD 1.78
- Revenue: $ 73.79 billion vs. $ 70.49 billion expected
CVS reported third-quarter net income of $ 1.59 billion, or $ 1.20 a share, up from $ 1.22 billion, or 93 cents a share, a year earlier.
Excluding items, it earned $ 1.97 per share, more than the $ 1.78 per share expected by analysts surveyed by Refinitiv.
Total revenue for the three-month period jumped about 10% to $ 73.79 billion from $ 67.06 billion a year earlier, beating expectations of $ 70.49 billion.
CVS sales skyrocketed as consumers came to stores for Covid-19 tests and vaccines. The company said it has completed more than 8 million tests and over 11 million injections over a three-month period. This is a slight decrease from the previous quarter, when 17 million vaccines were provided, but the number of tests increased from over 6 million.
Signs offering COVID-19 vaccination are visible outside the CVS pharmacy in Washington DC on May 7, 2021.
Mandel Ngan | AFP | Getty Images
Pharmacy rival Walgreens Boots Alliance has also benefited from the Covid-19 vaccines, especially as many employers demanded vaccinations. In mid-October, the company reported that it completed 13.5 million transactions in the last quarter, nearly double what it had expected.
Both companies plan to benefit from a new wave of vaccinations: revaccinations for adults and first doses for children aged 5-11.
CVS pharmacy volumes have also normalized from last year as people go to the doctor more often and get new prescriptions. The total number of pharmacies processed increased 5.3% in 30-day terms during the quarter compared to the period last year when Covid vaccines were eliminated. Taking into account the vaccine, this figure rose to almost 7%.
The company, which owns insurance company Aetna, has also consolidated its various healthcare offerings, such as encouraging health insurance members to visit MinuteClinics at CVS pharmacies for medical treatment. The company said it recently launched the Aetna Virtual Primary Care program, which allows people to see a doctor around the clock.
As of the end of Tuesday, CVS shares are up about 33% this year. The stock hit a 52-week high on Tuesday but closed at $ 91.15. Company the market value is $ 120.28 billion.