CVS Health on Wednesday reported fourth-quarter revenue and profit that topped estimates, even as its troubled insurance business continued to see higher medical costs.
The company also issued a full-year 2025 adjusted earnings outlook of $5.75 to $6 per share, which was in line with Wall Street’s expectations. But CVS did not provide a revenue forecast for the year.
It caps off the first full quarter with David Joyner, a longtime CVS executive, as CEO of the troubled retail drugstore chain. Joyner succeeded Karen Lynch in mid-October, as CVS struggled to drive higher profits and improve its stock performance.
The company underwent a management reshuffle as part of a broader turnaround plan that includes $2 billion in cost cuts over the next several years. CVS has grappled with rising costs in its insurance unit, Aetna, and a retail pharmacy business pressured by softer consumer spending and lower reimbursements for prescription drugs.
Here’s what CVS reported for the fourth quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG:
Earnings per share: $1.19 per share adjusted vs. 93 cents per share expected
$1.19 per share adjusted vs. 93 cents per share expected Revenue: $97.71 billion vs. $97.19 billion expected
Shares rose more than 6% in premarket trading.
CVS and other insurers such as UnitedHealth Group and Humana have seen medical costs spike over the last year as more Medicare Advantage patients return to hospitals for procedures they delayed during the pandemic.
Medicare Advantage, a privately run health insurance plan contracted by Medicare, has long been a driver of growth and profits for insurers. But investors have become concerned about the runaway costs tied to those plans, which cover more than half of all Medicare beneficiaries.
CVS booked sales of $97.19 billion for the fourth quarter, up 4.2% from the same period a year ago due to growth in its pharmacy business and insurance unit.
The company posted net income of $1.64 billion, or $1.30 per share, for the fourth quarter. That compares with net income of $2.05 billion, or $1.58 per share, for the year-earlier period.
Excluding certain items, such as amortization of intangible assets, restructuring charges and capital losses, adjusted earnings were $1.19 per share for the quarter.
CVS said its fourth-quarter earnings reflect higher medical costs in its insurance business and lower Medicare Advantage star ratings for the 2024 payment year, both of which weighed on the segment’s operating results for the quarter. Those star ratings help Medicare patients compare the quality of Medicare health and drug plans.
CVS Health (CVS) earnings Q4 2024
