Market Overview

CVS Shares Surge On Q3 Earnings, Raised Full-Year Outlook

CVS Shares Surge On Q3 Earnings, Raised Full-Year Outlook

Pharmacy benefit manager CVS Health Corporation (NYSE: CVS) beats earnings expectations in the third quarter of 2020. CVS reported $67.06 billion in revenue, which grew 3.5% year-over-year, beating consensus of $66.6 billion. Adjusted diluted earnings per share of $1.66 fell 9.8% YoY, beating consensus of $1.33. Non-GAAP net income declined 9.4% YoY to $2.18 billion.

Key Q3 Highlights: Revenue from the Pharmacy Services segment fell by a marginal 0.9% YoY to $35.71 billion, Retail/LTC segment grew 5.9% YoY to $22.73 billion, and the Healthcare Benefits segment increased 8.8% YoY to $18.70 billion.

CVS generated $12.3 billion in operating cash flow, which grew 20.4% YoY.

The number of Pharmacy claims processed rose by 3.7% YoY to 528.2 million. The retail Prescription volume went up by 5.8% YoY.

Pharmacy Services Generic dispensing rate fell to 87.9% compared to 88.1% in Q3 2019, while the Generic dispensing rate fell to 87.7% from 88.2% last year.

The number of Medical membership by the end of Q3 fell to 23.3 million, down 0.32 million from Q2, primarily reflecting a decline in Commercial products, partially offset by increases in Medicaid and Medicare products.

FY 2020 Outlook: CVS raised FY 2020 adjusted EPS guidance to range between $7.35 to $7.45, from $7.14 to $7.27 earlier, higher than mean analyst expectations of $7.24.

Operating cash flow guidance raised to range between $12.75 billion to $13.25 billion, from $11.0 billion to $11.5 billion earlier.

Price Action: CVS shares are trading higher by 3.27% to $63.45 in the pre-market session on the last check Friday.

Image Courtesy: Wikimedia


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