CVS posts healthy first-quarter results
NEW YORK - Specialty drugs and retail expansions boosted CVS Health's (CVS) first-quarter revenue by 18.9 percent, helping to offset higher costs and push results above Wall Street expectations.
The nation's second-largest drugstore chain also confirmed its full-year profit outlook, though its second-quarter forecast falls short of expectations.
First-quarter profit fell 6.1 percent during the period to $1.15 billion, or $1.04 per share, mainly on higher costs associated with the acquisition of Omnicare and pharmacies at Target (TGT). Excluding certain expenses, the company earned $1.18 per share.
The results topped Wall Street expectations, with the average estimate of 25 analysts surveyed by Zacks Investment Research for earnings of $1.16 per share.
The Woonsocket, Rhode Island-based drugstore chain and pharmacy benefits manager posted a18.9 percent boost in revenue to $43.22 billion in the period, also beating Street forecasts. Twenty-six analysts surveyed by Zacks expected $42.98 billion.
Revenue for the company's key pharmacy benefits unit rose 20.5 percent to $28.8 billion on a jump in claim volume and the sale of specialty drugs. The claim volume increase of 22.6 percent comes primarily from new business associated with the year-ago buyout of Omnicare and the expansion into the pharmacy and clinic business of retail giant Target.
Retail revenue rose 18.6 percent to $20.1 billion, also benefiting from the Omnicare and Target additions. Same-store sales growth (sales at stores open a year or more), another key indicator of retail health, rose 4.2 percent during the quarter.
For the current quarter ending in July, CVS Health expects its per-share earnings to range from $1.28 to $1.31. Analysts surveyed by Zacks had forecast adjusted earnings per share of $1.35. The company reaffirmed its outlook for full-year earnings in the range of $5.73 to $5.88 per share.
CVS Health leaders have said they expect growth to pick up in the second half of this year.
In premarket trading on Tuesday morning, CVS shares are up 0.8 percent, or 82 cents, to $102.27.