Healthcare Business

Is CVS Back on Track With Q4 Results?

When CVS Health Corp. (NYSE: CVS) reported its most recent quarterly results before the markets opened on Wednesday, the pharmacy chain posted $1.73 in earnings per share (EPS) and $66.9 billion in revenue. That exceeded the consensus estimates of $1.68 in EPS and $63.97 billion in revenue. In the same period of last year, CVS said it had $2.14 in EPS on revenue of $54.42 billion.

Note that revenue growth this past quarter was primarily due to the impact of the acquisition of Aetna, which the company acquired in November of 2018. Revenues also saw a boost as a result of increased volume and brand inflation in both the Pharmacy Services and Retail/LTC segments.

In terms of its segments, CVS reported as follows:

  • Pharmacy Services revenue increased 6.2% year over year to $37.1 billion, with operating income of $1.35 billion.
  • Retail/LTC revenues increased 2.5% to $22.58 billion, with operating income of $1.91 billion.
  • Health Care Benefits revenue more than doubled to $17.15 billion, up from $6.24 billion last year. Operating income for the segment is $386 million.

Looking ahead to the 2020 full year, CVS expects to see EPS in the range of $7.04 to $7.17. Consensus estimates are calling for $7.15 in EPS and $256.76 billion in revenue for the year.

Larry Merlo, president and CEO, commented:

As we work to transform the way health care is delivered to millions of Americans, we are driving continued business performance and generating positive momentum across the enterprise. Our fourth quarter and full-year financial results reflect strong financial and operational execution and a successful first year of integrating the Aetna business. We’re using our unmatched capabilities to create a higher-quality, simpler and more affordable health care experience, which benefits patients, clients and consumers and positions the company for continued success.

Shares of CVS were last seen up about 1.5% at $74.94, in a 52-week range of $51.72 to $77.03. The consensus price target is $81.21.