CVS Health Corp. (NYSE: CVS) released its third-quarter financial results before the markets opened on Wednesday. The firm said that it had $1.84 in earnings per share (EPS) and $64.8 billion in revenue, compared with consensus estimates that called for $1.77 in EPS and revenue of $62.99 billion. The same period of last year reportedly had EPS of $1.73 on $47.27 billion in revenue.
During the most recent quarter, revenue growth was primarily driven by the impact of the Aetna acquisition, as well as increased volume and brand name drug price inflation in both the Pharmacy Services and Retail/LTC segments. The revenue increase was partially offset by continued price compression in the Pharmacy Services segment, reimbursement pressure in the Retail/LTC segment and an increased generic dispensing rate.
Pharmacy segment revenues increased 6.4% year over year, primarily due to brand name drug price inflation, as well as increased total pharmacy claims volume, partially offset by continued price compression and an increased generic dispensing rate.
The Retail/LTC segment revenues increased 2.9%, primarily driven by increased prescription volume and brand name drug price inflation.
The Health Care Benefits segment saw an increase of $16.5 billion for the quarter driven by the Aetna acquisition.
Looking ahead to the full year, the company expects to see EPS in the range of $6.97 to $7.05. Consensus estimates are calling for $6.98 in EPS and $252.53 billion in revenue for the year.
Larry Merlo, president and CEO, commented:
Our third quarter results build on the positive momentum we have seen across the company since the beginning of the year. All of our core businesses performed in line with or above expectations, reflecting strong operational execution. As a result, we delivered strong growth and generated robust operating cash flow, which enabled us to continue to delever while returning capital to our shareholders.
Shares of CVS traded up more than 4% Wednesday morning, at $70.42 in a 52-week range of $51.72 to $82.15. The consensus price target is $71.13.