WOONSOCKET, R.I. — CVS Health posted first quarter sales and earnings that beat Wall Street forecasts. Revenue for the period through March 31 increased 11% to $85.3 billion, exceeding analysts’ projection of $80.8 billion. Adjusted earnings of $2.20 per share topped the average estimate of $2.09.
The company lowered its outlook for the full year, citing costs related to recent acquisitions. Management now forecasts adjusted per-share earnings in the range of $8.50 to $8.70, compared with its earlier projection of between $8.70 and $8.90.
“We delivered another strong quarter while executing on the strategy we outlined in December 2021, leading to the close of the Signify Health acquisition followed quickly by Oak Street Health,” noted Karen Lynch, CVS Health’s president and chief executive officer. “These additions are core to our strategy and will help unlock future growth as we push further into value-based care, which prioritizes keeping people healthy.”
CVS Health reported a net profit of $2.14 billion, or $1.65 a share, compared with $2.36 billion, or $1.77 a share, in the year-ago quarter. Operating income declined 2.8% on factors including the write-down of the Omnicare long-term care business and an increase in acquisition-related transaction and integration costs. The decline in operating income was partially offset by the absence of a $484 million opioid litigation charge recorded in the prior year.
The 5.1% decline in adjusted operating income was primarily driven by a decline in the retailer’s pharmacy and consumer wellness segment, though that was partially offset by gains in its health services segment.
CVS Health has realigned the composition of its segments to correspond with changes made to its operating model and to reflect how the business is managed. As a result, it formed a new health services segment, which provides a full range of pharmacy benefit management solutions and delivers health care services through the company’s medical clinics, as well as virtually and in the home. It also established a pharmacy and consumer wellness segment, which includes its retail and long-term care pharmacy operations, related pharmacy services, and front-store operations. This segment will also provide pharmacy fulfillment services to support the health services segment’s specialty and mail order pharmacy business.
CVS Health’s reportable segments are: health care benefits; health services; pharmacy and consumer wellness; and corporate/other.
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