FILE- In this Aug. 7, 2018, file photo a CVS Pharmacy building sign rests on a Jackson, Miss., store. CVS Health reports financial results Wednesday, May 1, 2019. (AP Photo/Rogelio V. Solis, File)
Earnings power from a major acquisition helped push profit at CVS Health up 42% in the first quarter and the company raised its 2019 forecast after it had started the year with a more pessimistic outlook.
CVS now expects adjusted earnings this year to range from $6.75 to $6.90 per share. That's up from an initial forecast the company made in February for earnings of $6.68 to $6.88 per share, an outlook that fell well below Wall Street expectations.
Analysts now expect earnings of $6.79 per share, according to FactSet.
CVS, the nation's second-largest drugstore chain, runs more than 9,900 stores and processes well over a billion prescriptions annually as a pharmacy benefit manager. So-called PBMs run prescription drug coverage for insurers, employers and other large clients.
Late last year, it jumped into health insurance when it acquired the insurer Aetna for roughly $69 billion.
A federal judge is still reviewing that acquisition, but CVS Health reported combined results for the first time Wednesday. Aetna helped to offset challenges that prescription processors like CVS Health are facing.
Insurers are pushing cost cuts, which squeezes profits on each prescription. Generic drugs are less profitable and stores face growing competition in the areas outside their pharmacies.
The Aetna deal gives CVS health a new line of business with 23 million customers. The Woonsocket, Rhode Island, company cited it as key in quarterly revenue numbers that jumped 35%, to $61.65 billion. Net income climbed to $1.42 billion from $998 million, while adjusted earnings totaled $1.62 per share.
That was 12 cents better than expected, according to a survey by Zacks Investment Research. Revenue also topped expectations.
Shares of CVS Health Corp. jumped more than 4% to $56.85 before the opening bell.
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Portions of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on CVS at https://www.zacks.com/ap/CVS
https://finance.yahoo.com/news/cvs-health-1q-earnings-snapshot-110315351.html
2019-05-01 11:21:00Z
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