CVS Health posts an upbeat financial report as customers stockpiled ahead of COVID-19

CVS Health (NYSE: CVS) released its quarterly financial results on Wednesday that topped analysts’ estimates for earnings and revenue. The company attributed its upbeat performance to customers stockpiling prescription drugs and related essentials ahead of the Coronavirus lockdown.

CVS, however, warned that the pandemic has fuelled a significant decline in foot traffic and weighed on the number of new prescriptions due to fewer doctor’s appointments amidst the health crisis.

The stock was reported around 3% up in premarket trading on Wednesday.

CVS Health’s Q1 financial results versus analysts’ estimates

According to Refinitiv, analysts had forecast CVS Health to print £51.85 billion in revenue in the first quarter. Their estimate for earnings per share (EPS) was capped at £1.32 per share. In its report on Wednesday, the company beat both estimates posting a higher £54.11 billion (8.3% year over year increase) in revenue and £1.55 of earnings per share.

At £1.63 billion, the American healthcare company’s net income in Q1 came in stronger than £1.15 billion in the same quarter last year.

The company also said that its digital services, app, and website were greatly in demand in the first quarter. Customers using its Minute Clinic (urgent care service) for virtual visits were recorded 600% higher as compared to the comparable quarter of 2019 while an annualized increase of 1,000% was noted in prescriptions that were delivered to customers’ homes in Q1. A double-digit increase in the use of the CVS app was also noteworthy in the recent quarter.

For the full-year, the company said that it expects its cash flow to lie in the range of £8.50 billion to £8.90 billion. The company estimates its 2020 earnings at £5.70 to £5.81 per share.

Other noticeable figures in CVS Health’s financial report

Other noticeable figures in the drugstore chain’s report on Wednesday include an almost 10% increase in prescription volume in the first quarter. Pharmacy business and store’s front, on the other hand, registered a 9.3% and 8% year over year increase in comparable-store sales respectively.  

CVS Health has continued hiring during the health emergency. In March, the company expressed plans of hiring 50K new workers for full-time, part-time, and temporary positions to address the rising demand.

At £49 per share, CVS Health is currently a little under 20% down year to date in the stock market. At the time of writing, the £64.57 billion company has a price to earnings ratio of 12.01.