A customer exits a CVS Health Corp. store in Oakland, California, U.S., on Friday, Aug. 2, 2019.
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CVS Health on Wednesday reported second-quarter earnings and revenue that beat expectations, as the company slashes costs and lays off thousands of employees.
CVS has implemented a cost-cutting program as it pushes deeper into health-care services in the wake of its $8 billion acquisition of Signify Health and its $10.6 billion purchase of Oak Street Health.
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Part of that effort calls for cutting 5,000 jobs, CNBC reported Tuesday.
Here’s what CVS recorded for its second quarter compared with Wall Street’s expectations, based on a survey of analysts by Refinitiv:
- Earnings per share: $2.21 adjusted, vs. $2.11 expected
- Revenue: $88.9 billion, vs. $86.5 billion expected
The health-care giant posted net income of $1.91 billion for the quarter, or $1.48 per share, a 37% decline from the same period in 2022 when CVS reported net income of $3.04 billion, or $2.29 per share. Excluding one-time items, CVS reported $2.21 per share for the period.
The company booked revenue of $88.9 billion for the quarter, a 10% increase compared with the year-ago period.
CVS maintained its full-year adjusted earnings guidance of $8.50 to $8.70 per share, after slashing its projections by 20 cents last quarter due to costs associated with its recent acquisitions.
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The company’s health services segment generated $46.22 billion in revenue, a 7.6% increase compared with the same quarter in 2022. The division includes the pharmacy benefit manager CVS Caremark and health-care services delivered in medical clinics, via telehealth and at home.
CVS’ retail pharmacy division generated $28.78 billion in sales, also 7.6% higher than the year ago-period, driven by increased prescription volume. The number of prescriptions filled rose 2.4% on a 30-day basis, excluding Covid-19 vaccinations. Same-store prescription volume jumped nearly 5%, excluding Covid vaccines.
The company’s health insurance segment generated $26.75 billion, a 17.6% increase over the second quarter of 2022. That division includes Aetna plans for the Affordable Care Act, Medicare Advantage, Medicaid, and dental and vision.
The insurance segment’s medical benefit ratio — a measure of total medical expenses paid relative to premiums collected — rose to 86.2% in the quarter, compared with 82.7% in the year-ago period. A lower ratio typically indicates that the company collected more in premiums than it paid out in benefits, resulting in higher profitability.
