External view of the CVS pharmacy in Danville, Pennsylvania.
Paul Weaver Lightrock | Getty images
CVS Health On Wednesday, revenues and profit were recorded in the fourth quarter, which exceeded the estimates, even when his restless insurance activity still saw higher medical costs.
The company also published the entire perspective of profits in the amount of 2025 from 5.75 to 6 USD per share, which was in line with the expectations of Wall Street. But CVS did not provide the forecast of revenues for this year.
First luminaire David JoynerThe longtime director of CVS, as the general director of the restless pharmacy network. Joyner replaced Karen Lynch in mid -October, because CVS fought to increase profits and improve their results in the warehouse.
The company has undergone the management of the management as part of a wider implementation plan, which covers $ 2 billion costs Cutting over the next few years. CVS is struggling with growing costs in the insurance unit, Aetna and the retail pharmaceutical industry exerted on soft consumer expenses and lower reimbursement of prescription drugs.
Here's what CVS reported in the fourth quarter compared to what Wall Street expected, based on a survey conducted by LSEG analysts:
- Profit per share: USD 1.19 per corrected shares compared to 93 cents for the action was expected
- Income: USD 97.71 billion compared to USD 97.19 billion expected
Actions increased by more than 6% in Premarket trade.
CV and other insurers like Unitedhealth group AND Humane Over the past year, medical costs over the past year, because more Medicare Advantage patients return to hospitals for delayed pandemic.
Medicare Advantage, a privately carried out plan for contractual health insurance by Medicare, has long been the driving force of growth and profits for insurers. But investors worried uncontrolled costs related to those plans that cover more than half of all Medicare beneficiaries.
CVS reserved sales of $ 97.19 billion in the fourth quarter, which is an increase of 4.2% compared to the same period a year ago due to the increase in pharmaceutical activity and the insurance unit.
The company recorded a net income of USD 1.64 billion, i.e. USD 1.30 per share, for the fourth quarter. Compared to net income in the amount of USD 2.05 billion, i.e. USD 1.58 per share, for a period of year.
Excluding some items, such as the depreciation of intangible assets, restructuring fees and capital losses, corrected earnings amounted to USD 1.19 per share for a quarter.
CVS said that his earnings in the fourth quarter are reflected in the higher medical costs in the insurance industry and lower grades of Medicare Advantage Star for the 2024 payment year, which both result from the operational results of the segment for the quarter. Stars' assessments help Medicare patients compared to the quality of Medicare Health and Drug Plans.
Pressure for an insurance unit
All three CVS business segments have overcome Wall Street's expectations on the fourth quarter.
The CVS insurance company reserved revenues of $ 32.96 billion in this quarter, which is an increase of over 23% compared to the fourth quarter of 2023. Analysts expected the unit to raise $ 32.89 billion during this period, in accordance with estimates from Streetaccount.
But the company recorded a corrected operating loss of USD 439 million in the fourth quarter, compared to the corrected operating income in the amount of USD 676 million during the profit period. This change was caused by higher medical costs and, among others, medicare Advantage Star grades.
The indicator of medical services of the insurance unit – the measure of total medical expenses paid in relation to the collected contributions – increased to 94.8% from 88.5% a year earlier. The lower indicator usually indicates that the company has collected more in contributions than paid benefits, which causes higher profitability.
Streetaccount stated that the ratio of the fourth quarter was lower than 95.9%, whose analysts were expected by analysts.
The CVS health services segment generated USD 47.02 billion in revenues per quarter, which is a decrease of over 4% compared to the same quarter in 2023. Analysts expected the unit to publish 44.06 billion USD during this period, according to Streetaccunt.
This unit includes Caremark, one of the largest pharmacy managers in the country. Caremark negotiates drug discounts with producers on behalf of insurance plans and creates lists of medicines or formulas that are covered by insurance and reimbursement of prescription pharmacies.
The CVS Health Services Department processed 499.4 million pharmacy claims during the quarter, compared to 600.8 million during the last year due to the loss of the nameless large client. Tyson Foods CNBC said in January 2024. He dropped CVS As a pharmacy manager for about 140,000 employees, but it is not clear whether other companies have stopped working with CVS during the year.
Apteki's CVS and consumer well -being reserved for the sale of $ 33.51 billion in the fourth quarter, which is over 7% compared to the same period of the year. Streetaccount said that analysts expected sales of $ 33.03 billion in this quarter.
This unit gives prescriptions in over 9,000 CVS pharmacies and provides other pharmacy services, such as vaccinations and diagnostic tests.
CVS said that the growth was partly caused by a higher prescription volume. The pressure of the pharmacy's return, launching new generic drugs and lower volume from items at the front of the store, such as pantry and toiletries, including a reduced number of stores, weighed the sale of the device.