CVS Health beats experts’ forecasts for earnings and revenue in the fourth quarter

CVS Health appreciated its pharmacy benefits management segment on Wednesday for upbeat quarterly performance results which announced better than expected earnings and revenue in the recent quarter.

According to Refinitiv, experts had anticipated $63.97 billion in revenue in the fourth quarter versus a much higher $66.9 billion that the company reported on Wednesday. On the earnings front, CVS Health revealed to have made $1.73 of earnings per share as compared to a relatively lower $1.68 forecast by the analysts.

CVS Health’s Guidance For Fiscal 2020

In its guidance for fiscal 2020, the drugstore chain also reported that it now expects $7.04 to $7.17 of earnings per share this year. Adjusted earnings for CVS in the fourth quarter were recorded at $1.75 billion versus $419 million in loss posted in the same quarter last year. In terms of operating income, Q4 saw a 1.3% growth to $3.8 billion.

In premarket trading on Wednesday, CVS Health was reported trading over 1% lower. At the time of writing, CVS Health is trading around $74 per share in the stock market that marks almost the same level at which it opened in January 2020. The annual gain in 2019, however, was registered at over 10%.

Revenue from the health benefits business in the fourth quarter noted an almost 200% gain to $17.15 billion as compared to $6.24 billion posted in 2018’s last quarter. Much of the gain, as per the company, was ascribed to Aetna acquisition in November 2018.

Same-store sales in Q4 saw a 3.2% increase while CVS Health’s pharmacy unit printed a higher 4.1% growth in sales in the recent quarter. In the fourth quarter that ended on December 31^st, the pharmacy unit generated $37 billion of revenue for the drugstore chain versus $34 billion recorded in 2018’s fourth quarter. The retail unit, on the other hand, reported $22.5 billion in revenue that was marginally higher than the figure for last year. CVS Health retail segment primarily deals with prescription refills and general merchandise.

CVS Acquired Aetna For $70 Billion In September 2019

CVS Health recently acquired Aetna (health insurer) for $70 billion last September. The integration of the health insurer and the company’s growth plans are expected to fuel its performance in the upcoming years. Larry Merlo, the current president and CEO of CVS Health commented on the earnings report and stated:

“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. As a result of the significant progress we made in 2019, and meeting or exceeding our expectations for the year, we raised our outlook for 2020.”