WOONSOCKET, R.I. — CVS Health topped analysts’ expectations for fourth-quarter sales and earnings, led by strong insurance and retail results.

Earnings per share for the three months ended Dec. 31 rose 0.5% from the year-ago period to $1.99 on revenue of $83.8 billion (up 9.5%). Wall Street had projected adjusted EPS of $1.92 on revenue of $76.2 billion.

The company posted the results on the heels of its announcement that it was buying primary care center operator Oak Street Health for $10.6 billion.

“Last year was defined by outperformance across our foundational businesses, robust cash flow from operations and meaningful progress against our value-based care delivery strategy,” said president and CEO Karen Lynch.

Lynch called 2022 “a year of progress,” saying, “we continue to build on that momentum with bold moves that will improve the health care experience.”

Full-year revenue increased 10.4%, driven by growth across all segments.

Operating income increased 62.3% in the fourth quarter compared to a year earlier, primarily due to the absence of a store impairment charge of approximately $1.4 billion recorded in the prior year, as well as a pre-tax gain of $250 million on the sale of the company’s wholly owned subsidiary bswift LLC (“bswift”) recorded in the three months ended December 31, 2022. These increases were partially offset by the decreases in adjusted operating income described below.

Operating income decreased 41.3% for the year ended December 31, compared to the prior year primarily due to $5.8 billion of opioid litigation charges and a $2.5 billion loss on assets held for sale related to the write-down of the Omnicare long-term care business (“LTC business”), both of which were recorded during 2022.

These decreases were partially offset by the absence of the store impairment charge of approximately $1.4 billion and a $431 million goodwill impairment charge on the remaining goodwill of the LTC reporting unit, both of which were recorded in the prior year, a decrease in amortization of intangible assets compared to the prior year, as well as pre-tax gains of $250 million on the sale of bswift and $225 million on the sale of PayFlex Holdings, Inc. (“PayFlex”) recorded in 2022.

Adjusted operating income decreased $141 million in the three months ended December 31, 2022 compared to the prior year primarily driven by declines in the Retail/LTC and Corporate/Other segments, largely offset by increases in the Health Care Benefits and Pharmacy Services segments.

Growth reported across all product lines

Health Care Benefits segment revenues increased 11.3% and 11.2% for the three months and year ended December 31, 2022, respectively, compared to the prior year driven by growth across all product lines.

Adjusted operating income increased 68.2% for the three months ended December 31, 2022 compared to the prior year primarily driven by the net favorable impact of COVID-19 compared to the prior year and strong underlying performance, partially offset by the unfavorable impact of the flu compared to the prior year.

Adjusted operating income increased 19.4% for the year ended December 31, 2022 compared to the prior year primarily driven by the net favorable impact of COVID-19 compared to the prior year, strong underlying performance and membership growth. These increases were partially offset by incremental investments to support growth in the business, the unfavorable impact of the flu compared to the prior year and net realized capital losses.

The MBR decreased from 87.0% to 86.0% in the three months ended December 31, 2022 compared to the prior year and decreased from 85.0% to 84.0% in the year ended December 31, 2022 compared to the prior year. The decrease in both periods was primarily driven by the net favorable impact of COVID-19 compared to the prior year, partially offset by the unfavorable impact of the flu compared to the prior year.

Medical membership as of December 31, 2022 of 24.4 million increased 109,000 members compared with September 30, 2022, reflecting increases across all product lines.

Medical membership as of December 31, 2022 of 24.4 million increased 548,000 members compared with December 31, 2021, reflecting increases in Medicare and Commercial membership, as underlying Commercial growth more than offset the impact of international divestitures. These increases were partially offset by a decline in Medicaid membership reflecting the previously disclosed loss of a large customer in the third quarter of 2022.

The segment experienced favorable development of prior-periods’ health care cost estimates in its Government Services and Commercial businesses during the three months ended December 31, 2022, primarily attributable to third quarter 2022 performance.

Prior years’ health care costs payable estimates developed favorably by $654 million during the year ended December 31, 2022. This development is reported on a basis consistent with the prior years’ development reported in the health care costs payable table in the Company’s annual audited financial statements and does not directly correspond to an increase in 2022 operating results.

Pharmacy Services segment revenues increased 11.2% and 10.6% for the three months and year ended December 31, 2022, respectively, compared to the prior year primarily driven by increased pharmacy claims volume, growth in specialty pharmacy and brand inflation, partially offset by continued client price improvements.

Adjusted operating income increased 9.0% and 7.2% for the three months and year ended December 31.