CVS Well being (CVS) Q1 2022 earnings

CVS Health on Wednesday outpaced Wall Avenue’s expectations for first-quarter earnings and raised its steering for the yr, because it noticed demand for prescriptions and extra, whereas demand for Covid vaccines and testing declined.

The health-care firm mentioned it now expects adjusted earnings per share for 2022 to vary from $8.20 to $8.40 in contrast with its earlier forecast of between $8.10 to $8.30.

Shares have been up greater than 1% in premarket buying and selling.

This is what the corporate reported for the three-month interval ended March 31, in contrast with what analysts have been anticipating, based mostly on a survey of analysts by Refinitiv:

• Earnings per share: $2.22 adjusted vs. $2.15 anticipated
• Income: $76.83 billion vs. $75.39 billion anticipated

The health-care firm reported web revenue of $2.31 billion, or $1.74 per share, larger than the $2.22 billion, or $1.68 per share, a yr earlier.

Excluding objects, CVS earned $2.22 per share, greater than the $2.15 per share anticipated by analysts surveyed by Refinitiv.

Income elevated to $76.83 billion from $69.1 billion a yr earlier. That topped/fell in need of analysts’ expectations of $75.39 billion.

Prospects have turned to CVS drugstores throughout pandemic, looking for Covid exams and vaccines. Now, the corporate is concentrated on different methods to attract foot site visitors, drum up enterprise and stem competitors from on-line retailers. It has added extra health-care companies to its shops and inspired members of its medical insurance enterprise, Aetna, to go to its drugstores for medical care.

Within the first quarter, CVS noticed declining demand for pandemic-related companies. It administered greater than 6 million Covid exams and greater than 8 million Covid vaccines within the three-month interval. That compares to greater than 8 million Covid exams and greater than 20 million Covid vaccines within the fourth quarter.

As a substitute of getting Covid exams at drugstores, extra customers are shopping for over-the-counter check kits. CVS pointed to these as a gross sales driver within the quarter — however didn’t specify what number of it bought.

Identical-store gross sales at CVS grew 10.7% within the first quarter in comparison with the year-ago interval. Within the pharmacy, same-store gross sales rose 10.1% and within the entrance retailer, same-store gross sales elevated 13.2%.

CVS mentioned it attracted new clients, stuffed extra prescriptions and noticed a extra typical cough, chilly and flu season within the first quarter. Within the year-ago interval, fewer customers sought drugs for seasonal diseases as they wore masks and spent extra time at residence. The corporate mentioned it additionally noticed gross sales improve from pharmacy model inflation.

Gross sales will increase have been partially offset by the introduction of latest generic medicine, reimbursement strain within the pharmacy phase and a drop in Covid testing demand, the corporate mentioned.

The corporate’s working revenue took successful, declining 2.4% within the quarter, attributable to a pending settlement between CVS and the state of Florida to settle opioid claims towards the corporate for $484 million. That settlement will likely be paid over an 18-year interval.

As of Tuesday’s shut, shares of CVS are down about 7% thus far this yr, outperforming the 12% decline of the S&P 500. Shares closed Tuesday at $95.98, bringing the corporate’s market worth to $126.04 billion.

Learn the corporate’s press launch here.

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