Is CVS Back on Track With Q4 Results?

By Chris Lange Published Feb 12, 10:35AM EST

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Is CVS Back on Track With Q4 Results? — © jeepersmedia / Flickr

When CVS Health Corp. (NYSE: CVS) reported its most recent quarterly results before the markets opened on Wednesday, the pharmacy chain posted $1.73 in earnings per share (EPS) and $66.9 billion in revenue. That exceeded the consensus estimates of $1.68 in EPS and $63.97 billion in revenue. In the same period of last year, CVS said it had $2.14 in EPS on revenue of $54.42 billion.

Note that revenue growth this past quarter was primarily due to the impact of the acquisition of Aetna, which the company acquired in November of 2018. Revenues also saw a boost as a result of increased volume and brand inflation in both the Pharmacy Services and Retail/LTC segments.

In terms of its segments, CVS reported as follows:

Pharmacy Services revenue increased 6.2% year over year to $37.1 billion, with operating income of $1.35 billion.
Retail/LTC revenues increased 2.5% to $22.58 billion, with operating income of $1.91 billion.
Health Care Benefits revenue more than doubled to $17.15 billion, up from $6.24 billion last year. Operating income for the segment is $386 million.

Looking ahead to the 2020 full year, CVS expects to see EPS in the range of $7.04 to $7.17. Consensus estimates are calling for $7.15 in EPS and $256.76 billion in revenue for the year.

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Larry Merlo, president and CEO, commented:

As we work to transform the way health care is delivered to millions of Americans, we are driving continued business performance and generating positive momentum across the enterprise. Our fourth quarter and full-year financial results reflect strong financial and operational execution and a successful first year of integrating the Aetna business. We’re using our unmatched capabilities to create a higher-quality, simpler and more affordable health care experience, which benefits patients, clients and consumers and positions the company for continued success.

Shares of CVS were last seen up about 1.5% at $74.94, in a 52-week range of $51.72 to $77.03. The consensus price target is $81.21.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.