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CVS Health Q4 Results Top Estimates

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CVS Health Corp. (CVS) Wednesday reported a profit for its fourth-quarter, compared to net loss last year, reflecting higher operating income, partially offset by higher income tax expense associated with increase in pre-tax income. Quarterly revenues grew 22.9 percent, primarily due to impact of acquisition of Aetna.

Both adjusted earnings per share from continuing operations and quarterly revenues topped analysts' expectations.

In Wednesday pre-market trade, CVS is trading $76.20, up $2.35 or 3.18 percent.

Looking ahead for 2020, the company expects earnings per share from continuing operations to be in the range of $5.47 - $5.60, and adjusted earnings per share of $7.04 - $7.17. Analysts expect annual earnings of $7.15 per share.

The company projects full year 2020 GAAP operating income to be in the range of $12.8 billion to $13.0 billion, and adjusted operating income of $15.5 billion to $15.8 billion.

The company reported that its net income attributable to the company for the fourth-quarter was $1.75 billion or $1.33 per share, compared to a loss of $419 million or $0.37 per share in the same quarter last year.

Adjusted income from continuing operations attributable to the company for the fourth-quarter was $2.27 billion or $1.73 per share, compared to $2.42 billion or $2.14 per share in the prior year. Analysts polled by Thomson Reuters expected the company to report earnings of $1.68 per share for the fourth-quarter. Analysts' estimates typically exclude special items.

Adjusted operating income for the quarter increased 1.3% from the prior year, due to the Aetna Acquisition as well as increased volume and improved purchasing economics in the Pharmacy Services and Retail/LTC segments. It was partially offset by continued reimbursement pressure in the Retail/LTC segment and continued price compression in the Pharmacy Services segment.

Total revenues for the quarter grew 22.9 percent to $66.89 billion from last year's $54.42 billion, primarily due to the impact of the acquisition of Aetna, as well as increased volume and brand inflation in both the Pharmacy Services and Retail/LTC segments. Analysts expected revenues of $63.97 billion for the quarter.

The revenue increase was partially offset by continued price compression in the Pharmacy Services segment, continued reimbursement pressure in the Retail/LTC segment and an increased generic dispensing rate.

Adjusted revenues for the quarter increased 23.1%.

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