CVS Health earnings top estimates as pharmacy sales get a lift from Covid testing, vaccines

CVS Health‘s fourth-quarter earnings beat Wall Road’s expectations on Tuesday as pharmacy sales got a lift and the drugstore chain expands Covid-19 testing and vaccines.

Shares of the company had been down about 3% early Tuesday.

Here’s what the company reported for the fiscal fourth quarter ended Dec. 31, compared with what analysts had been awaiting, based on a contemplate of analysts by Refinitiv:

• Earnings per share: $1.30 adjusted vs. $1.24 expected
• Earnings: $69.55 billion vs. $68.75 billion expected

The drugstore chain reported fiscal fourth-quarter score earnings of $975 million, or 75 cents per share, down from $1.74 billion, or $1.33 per share, a year earlier.

With the exception of gadgets, it earned $1.30 per share, outpacing the $1.24 per share expected by analysts surveyed by Refinitiv.

Earnings rose to $69.55 billion from $66.89 billion a year earlier. That’s greater than analysts’ expectations of $68.75 billion.

CVS also shared its tubby-year guidance for the upcoming fiscal year. It projected earnings per share ranging from $6.06 to $6.22 and tubby-year adjusted earnings per share to $7.39 to $7.55. Its tubby-year cash float from operations is projected at $12 billion to $12.5 billion.

The company cautioned that its fiscal first quarter will be its lowest earnings quarter for the year because of the weaker flu season and investments to its Covid vaccine program.

For CVS, the pandemic has introduced advantages and downsides. On the one hand, the global health disaster has caused some of us to skip journeys to the shop and doctor’s workplace. That has weighed on its entrance-of-store sales and resulted in fewer unusual prescriptions. On the alternative hand, it has given the drugstore a chance to blow their very gain horns the health-care services and products it gives, such as telemedicine and its MinuteClinic, and gain unusual industry alternatives savor drive-thru testing.

Same-store sales grew 5.3% all via the three-month length compared with the same time a year earlier. They jumped by 7.5% in the pharmacy division, as prescription volume rose but had been down by 1.8% in the entrance of store, as customers gash back on visits and did now not wish to purchase as indispensable flu and cool medication all via the pandemic.

CVS is taking on a larger role in the administration of Covid vaccines at its stores. Last week, the federal authorities shipped doses immediately to retail pharmacies’ stores — together with CVS locations in 11 states.

On a Tuesday call with investors and analysts, CVS Chief Govt Karen Lynch said about 8 million customers came to CVS for the primary time because of Covid testing. She said it anticipates this can reach tens of millions of unusual customers with Covid vaccines, too.

“We are able to employ this opportunity to shape a health skills that demonstrates the value we bring,” she said. “This can create the opportunity to expand our customer base whereas deepening relationships with latest customers.”

She described the federal program with CVS and other pharmacies as “the linchpin of the Biden administration’s plan to vaccinate 300 million Americans by the tip of the summer season.” She said CVS has the capacity to administer 20 million to 25 million doses per thirty days, depending on supply.

CVS said it has administered about 15 million checks nationwide. It has also given more than 3 million Covid vaccines in over 40,000 long-time frame care facilities.

The drugstore chain and its competitor, Walgreens, struck a deal with the federal authorities in October to produce the shots to staff and residents at nursing houses and assisted living facilities. It began vaccinations in December and plans to entire each doses at the long-time frame care facilities in mid-March.

CVS owns health insurer, Aetna, which it acquired in 2018. As the nation’s largest pharmacy chain and a major insurance player, it has blended those assets to drive sales and lower charges. It has became over 650 locations into HealthHubs, the place of us can trail to manage their diabetes, meet with a therapist for behavioral health and even participate in a yoga class. Some Aetna insurance plans encourage participants to head to MinuteClinics instead of another health-care provider by having zero copay for the visits.

Lynch said it is accelerating investments into a wider range of services and products, past accurate filling prescriptions. She pointed to a program that brings kidney dialysis services and products into the home to lower hospital admissions and an oncology program that matches of us to clinical trials.

Next year, she said the company will reenter the individual public exchange created by the Affordable Care Act, which allows of us to purchase their very gain health insurance plans. She said this may presumably be the company’s first branded CVS Health Aetna product.

As of Friday’s market shut, CVS shares had been up much less than 1% over the past year. The company’s stock, which has a market value of $97.13 billion, touched a 52-week high of $77.23 in mid-January. It closed at $74.21 on Friday.

Read the tubby press release here.