CVS health On Wednesday, they reported on revenue and profit in the fourth quarter, which are top notch, even while his problematic securing job continued to see higher medical costs.
The company also announced a year -round chance of earnings from $ 2025 from $ 5.75 to $ 6 per share, which was in line with Wall Street expectations. But the CVS did not provide the prognosis of revenue for the year.
Enthusiastically the first whole quarter with David Joynerlongtime CVS CEO, as executive director of a troubled drugstore chain. Joyner managed to Karen Lynch in mid -October, as CVS fought to achieve more profit and improve his stocks.
The company was subjected to renewing management as part of a wider plan that includes $ 2 billion in costs decreases in the next few years. CVS struggled with growing costs in his insurance unit, Aetna and retail pharmacies under pressure from the softer consumer consumer consumer and smaller recipe remedies.
Here’s what the CVS reported in the fourth quarter compared to what Wall Street expected, based on research by LSEG analysts:
- Earnings per share: $ 1.19 per share adapted to 93 cents per share expected
- Income: 97.71 billion USD is expected compared to $ 97.19 billion
The shares have increased more than 6% in the Pre -Rickni trade.
CVs and other insurers like Unitedhealth Group and Human They saw that medical expenses increased in the last year because more patients Medicare Advantage returned to hospitals for procedures they had delayed during pandemic.
Medicare Advantage, a private health insurance plan that has contracted Medicare, has been a long driver of growth and profit for insurers. But investors have become concerned about the run out of the costs related to those plans covering more than half of all Medicare users.
CVS booked sales of $ 97.19 billion in the fourth quarter, which is 4.2% compared to the same period a year ago due to the growth of its pharmaceutical and insurance unit.
The company published a net revenue of $ 1.64 billion or $ 1.30 per share in the fourth quarter. This is compared to a net revenue of $ 2.05 billion, or $ 1.58 per share, for the period of the year.
With the exception of certain items, such as depreciation of intangible assets, the costs of restructuring and capital losses, the adapted earnings were $ 1.19 per quarter section.
CVS said that his earnings in the fourth quarter reflects higher medical expenses in his insurance business and lower stars Medicare Advantage for 2024 payments, and both of the jars on the operational results of the quarter segment. These star ratings help Medicare patients to compare the quality of plans for Medicare’s health and medicines.
Pressure on the insurance unit
All three CVS business segments beat Wall Street expectations for the fourth quarter.
CVS’s insurance job has booked $ 32.96 billion in revenue during the quarter, which is more than 23% in the fourth quarter 2023. Analysts expected the unit to collect in the amount of $ 32.89 billion, according to StraetacCount estimates .
However, the job was reported by the fourth quarter about the adapted operating loss of $ 439 million, compared to the $ 676 million in the annual period of operating revenue. This change was fueled by the higher medical costs and ratings of the Star Medicare Advantage, among other factors.
Medical benefit ratio – a measure of total medical costs paid compared to the collected premiums – increased to 94.8% with 88.5% a year earlier. The lower ratio usually indicates that the company was collected more in premiums than paid in benefits, resulting in greater profitability.
The fourth trimester ratio was lower than 95.9% that analysts expected, Streecount of Assessment said.
The CVS Health Services segment generated $ 47.02 billion in quarter revenue, which is a drop more than 4% compared to the same quarter 2023. Analysts expected the unit to publish $ 44.06 billion for sales for that period, Streetaccount said.
This unit includes Caremark, one of the largest pharmacy managers in the country. Caremark negotiate discounts on medicines with manufacturers on behalf of insurance plans and creates lists of medicines or formulars covered by insurance and compensate for the recipe pharmacy.
The CVS Health Services Department processed 499.4 million pharmaceutical requirements during the quarter, which is a drop of 600.8 million during the period before the loss of an unnamed large client. Tyson Foods said CNBC in January 2024. He dropped the resume As a pharmaceutical fee manager for his approximately 140,000 employees, but it is not clear if any other companies stopped working with CVS during the year.
The CVS Department of Pharmacy and Consumer Wellness has booked $ 33.51 billion in sales in the fourth quarter, which is more than 7% compared to the same period a year earlier. Analysts were expected to sell $ 33.03 billion for quarterly, Stroetaccount said.
This unit issues recipes at CVS more than 9,000 retail pharmacies and provides other pharmacies, such as vaccination and diagnostic testing.
The increase is partially triggered by a larger recipe volume, CVS said. Plaque pharmacy, starting new generic drugs and a lower volume from front stores such as pantra food and toilet supplies, including a reduced number of stores, was taken out on sale of units.
