MESSAGE
| DATE | 2023-08-11 |
| FROM | Ruben Safir
|
| SUBJECT | Subject: [Hangout - NYLXS] CVS - Theives Profit
|
CVS Reports Stronger Demand Amid Cost-Cutting Push
Ngai Yeung
3–4 minutes
Business
Earnings
Healthcare company says 10.3% increase in overall sales driven
by growth in health benefits business
CVS Health reported a 10.3% increase in its second-quarter
sales, driven by growth in its health benefits business.
Health Status
The Woonsocket, R.I.-based company’s healthcare benefits segment
reported revenue of $26.7 billion, up 17.6% from a year ago as
more people used Medicare Advantage compared with the same
period last year.
Its health services segment saw revenue climb 7.6% in the latest
quarter to $46.2 billion, driven by recent acquisitions.
The healthcare company has been expanding the range of its
offerings lately. Earlier this summer, the company closed a
$10.6 billion deal for Oak Street Health, which operates
primary-care clinics for the elderly. The company completed the
almost $8 billion acquisition of home-healthcare company Signify
Health in March.
The company’s pharmacy and consumer-wellness segment posted
revenue of $28.8 billion, up from $26.7 billion a year ago. The
sales were helped by higher drug prices and prescription volume,
which partially offset a fall in demand for Covid-19 vaccines
and tests and a weaker flu season compared with last year.
Retail Shrink
CVS this week said it was shedding about 5,000 jobs, primarily
in corporate roles, to help cut costs. The company is also
trimming down on travel expenses and its use of consultants and
vendors.
The company reported a $496 million pretax restructuring charge
for the quarter and expects to complete its restructuring
program by the end of 2023.
The Bottom Line
Revenue for the quarter ended June 30 was $88.9 billion, ahead
of analyst estimates of $86.4 billion, according to FactSet.
The company lowered its full-year per-share earnings guidance to
between $6.53 and $6.75, compared with its previous view of
$6.90 and $7.12.
Stripping out one-time items, earnings per share came in at
$2.21, compared with $2.13 expected by analysts polled by
FactSet.
Write to Ngai Yeung at ngai.yeung-at-wsj.com
Corrections & Amplifications
CVS Health lowered its outlook for per-share earnings for the
full year. An earlier version of this article incorrectly said
that the company had raised its outlook for the year. (Corrected
on Aug. 2)
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