Pedestrians pass in front of a CVS location in New York.
Scott Mlyn | CNBC
CVS Health on Wednesday reported third-quarter earnings that beat Wall Street’s estimates as its Aetna insurance business helped juice the company’s profit by 10%.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: $1.84, adjusted, vs. $1.77 expected
- Revenue: $63.81 billion vs. $62.99 billion expected
CVS reported net income of $1.53 billion, or $1.17 per share, up 10% from $1.39 billion, or $1.36 per share a year earlier. Excluding one-time items, such as a charge related to closing stores, CVS earned $1.84 per share, above the $1.77 per share expected by analysts surveyed by Refinitiv.
Revenue reached $63.81 billion, a sharp increase from a year earlier, before CVS acquired health insurer Aetna in November. With the acquisition, CVS’ portfolio includes a health insurer, a pharmacy benefits manager and a chain of about 9,900 drugstores.
“Importantly, our teams are working together across the enterprise to maximize value to our members, consumers, patients and shareholders, and our operational and financial performance this year reflects their efforts to continue to use our unmatched combination of assets by enhancing and creating products and services to further grow and differentiate our businesses,” CVS CEO Larry Merlo told analysts on a call reviewing the results.
The company raised its full-year adjusted earnings forecast to between $6.97 to $7.05 per share from the previously estimated range of $6.89 to $7 per share.
Shares of CVS rose nearly 5% Wednesday.
CVS is trying to transform its business. The company will remodel about 1,500 of its stores to its new HealthHUB format, which includes more health services and products, by the end of 2021.
CVS opened its first three HealthHUBs in Houston at the beginning of this year. Merlo told analysts Wednesday these stores have seen higher prescription sales, more MinuteClinic visits, higher sales of products in the front of its stores and better margins.
CVS has yet to disclose any financial metrics for the HealthHUBs. Merlo said the company will move from “qualitative” to “quantitative” definitions as CVS opens more HealthHUBs.
CVS on Wednesday also said it will close 22 “underperforming” stores early next year, in addition to the 46 stores it shuttered earlier this year.
Correction: An earlier version misstated third-quarter revenue results in one reference.