CVS Health Posts Q3 Loss, Adj. EPS Tops View; Lifts FY22 Adj. EPS Forecast

cvchealth may07 02nov22 lt

CVS Health Corp. on Wednesday reported a hefty loss in its third quarter on charges, despite higher revenues. Adjusted earnings and revenues topped market estimates. Further, the health insurer trimmed its fiscal 2022 outlook for reported earnings, but raised adjusted earnings view in line or above analysts' estimates.

In pre-market activity on the NYSE, CVS shares were gaining around 1 percent to trade at $95.49.

Karen Lynch, CVS Health President and CEO, said, "We delivered another outstanding quarter, and have raised full-year guidance as a result. We continue to execute on our strategy with a focus on expanding capabilities in health care delivery, and the announced acquisition of Signify Health will further strengthen our engagement with consumers."

For the year 2022, CVS Health now expects earnings per share in a range of $3.12 to $3.22, lower than previously expected $7.23 to $7.43.

Further, the company raised adjusted earnings per share guidance range to $8.55 to $8.65 from previously expected $8.40 to $8.60.

On average, 24 analysts polled by Thomson Reuters expect earnings of $8.55 per share for the year. Analysts' estimates typically exclude special items.

The company also raised its full-year 2022 cash flow from operations guidance range to $13.5 billion to $14.5 billion from $12.5 billion to $13.5 billion.

In its third quarter, CVS Health's net loss was $3.41 billion or $2.60 per share, compared to last year's profit of $1.59 billion or $1.20 per share.

The latest results included $5.2 billion pre-tax opioid litigation charges and a $2.5 billion pre-tax loss on assets held for sale related to the Omnicare long-term care business or LTC business.

Adjusted earnings per share were $2.09, compared to prior year's $1.97.

Analysts expected earnings of $1.99 per share for the quarter.

Total revenues for the quarter grew 10 percent to $81.16 billion from last year's $73.79 billion. Analysts expected revenues of $76.75 billion.

The Health Care Benefits segment's total revenues increased 9.9 percent, driven by growth across all product lines.

Pharmacy Services Segment's revenues were up 10.7 percent primarily on increased pharmacy claims volume, growth in specialty pharmacy and brand inflation.

Retail/LTC Segment recorded 6.9 percent revenue growth benefited mainly by increased prescription and front store volume, including the sale of COVID-19 over-the-counter test kits.

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