CVS Health Corp. (CVS) -) on Wednesday posted stronger-than-expected second-quarter earnings while reiterating its full-year profit forecasts, thanks to solid gains in its pharmacy benefits division.
CVS said adjusted earnings for the three months ended in June were pegged at $2.21 per share, down 8% from the year-earlier period but 9 cents ahead of the Wall Street consensus forecast. Group revenue, CVS said, rose 10.2% from a year earlier to $88.9 billion, again topping analysts' estimates of an $86.45 billion tally.
Pharmacy & Consumer Wellness sales, which were formerly reported in the Retail segment, were up 7.6% to $28.74 billion, "driven by pharmacy drug mix, increased prescription volume and brand inflation. These increases were partially offset by the impact of recent generic introductions, decreased covid-19 vaccinations."
Looking into the back half of the year, CVS repeated that it saw profits in the region of $8.50 to $8.70 per share, although CFO Shawn Guertin pegged the group's prior forecast at "about" $9 per share in a conference call with investors Wednesday. CVS also reiterated its forecast for cash flows from its overall business to come in between $12.5 billion to $13.5 billion.
"Our diversified business model delivered strong results this quarter," said CEO Karen Lynch. "We continue to execute on our strategy to expand access to health services across our care delivery channels and strengthen our engagement with consumers to improve their health and well-being."
CVS Health shares were marked 2.23% lower in early Wednesday trading immediately following the earnings release to change hands at $74.38 each.
The group's health-care-benefits division saw sales rise 17.6% to $26.75 billion. The group's medical-cost ratios -- a key metric of profitability -- rose by 3.5% to 86.2%.
Guertin said the 2023 forecast "prudently assumes that these medical cost trends will remain elevated" for the rest of the year.
Earlier this spring, Tim Noel, who runs UnitedHealth's (UNH) -) Medicare and retirement business, said the company was seeing a notable increase in older Americans opting to undergo elective procedures they had delayed during the covid pandemic.
"We're seeing that more seniors are just more comfortable accessing services for things that they might have pushed off a bit, like knees and hips," Noel said in remarks reported by Reuters as part of a panel discussion at a Goldman Sachs conference in Dana Point, Calif.
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