Investors Punish CVS Health For Providing Tepid Forecast

CVS Health Corp CVS delivered better than expected EPS for the third quarter though revenue missed. However, the company offered downbeat guidance for the fourth quarter and next year.

• Reports 28 percent increase in adjusted EPS to $1.64, beats by $0.07.
• Delivers 15.5 percent growth in revenue of $44.6 billion; misses by $0.69 billion.
• Offers adjusted EPS forecast of $1.64-$1.70 for the fourth quarter versus $1.79 expectations.
• Lowered and Narrowed full year adjusted EPS from $5.81-$5.89 to $5.77-$5.83 compared to $5.85 expected by the Street.
• For the full year 2017, CVS expects adjusted EPS of $5.77-$5.93 versus $6.53 expected by analysts.
• Announces a fresh share buyback program of a maximum of $15 billion.

CVS Health President and CEO Larry Merlo stated, "We are currently experiencing slowing prescription growth in the overall market as well as a soft seasonal business. These factors combined are leading us to reduce the mid-point of our guidance for this year by five cents per share. The network changes have more significant implications for our 2017 outlook. While we expect a healthy increase in PBM operating profit growth in 2017, we expect a decrease in retail operating profit growth."

The stock plunged 11.98 percent to $73.40 in the pre-market session.