CVS Health released its Q1 results on Wednesday, with earnings and revenue surpassing expectations. However, the company lowered its full-year profit guidance due to the costs related to recent acquisitions. CVS shares fell more than 1% during premarket trading on Wednesday.
Based on a Refinitiv survey, CVS Health’s earnings per share were $2.20 adjusted, compared to the expected $2.09. The company reported revenue of $85.28 billion, up 11% from $76.83 billion the previous year. Excluding one-time items, CVS Health reported earnings of $2.20 per share for the period.
CVS Health’s health services segment saw revenue of $44.59 billion, a 12.6% increase from $39.62 billion in the same quarter last year. The division includes its pharmacy benefit manager CVS Caremark and health-care services delivered in medical clinics, through telehealth, and at home. Pharmacy claims processed in this division rose by 3.7% compared to Q1 2022, due in part to an elevated cough, cold, and flu season.
CVS Health’s health insurance segment generated revenue of $25.88 billion, up 12% from the previous year. The division includes Aetna Affordable Care Act, Medicare Advantage, Medicaid, dental, and vision plans. Total membership in CVS medical plans rose by 1.1 million to 25.5 million. The insurance plans’ medical benefit ratio increased to 84.6% from 83.4% the previous year, indicating higher profitability.
CVS Health’s retail segment booked revenues of $27.92 billion, a 7.8% increase from $25.89 billion in the same period in 2022. The division includes prescriptions dispensed in its 9,900 brick-and-mortar drug stores, infusion services, testing, and vaccine administration. Prescriptions filled increased by 2.5% compared to the same period last year, again due in part to the elevated cough, flu, and cold season.
Despite strong Q1 results, CVS Health lowered its 2023 adjusted earnings guidance to a range of $8.50 to $8.70, which is 20 cents lower than its previous projection of $8.70 to $8.90. The company attributed the revision to costs associated with its $8 billion acquisition of Signify Health and its $10.6 billion purchase of Oak Street Health, among other items.
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