CVS Health exceeded Q1 earnings and revenue expectations, reporting a profit of $2.14B ($1.65/share) compared to $2.35B ($1.77/share) YoY. The company lowered its full-year profit guidance due to acquisition-related costs, with Q1 earnings per share of $2.20. Total revenue for the quarter was $85.28B, up 11% YoY. CVS now expects 2023 adjusted earnings of $8.50-$8.70/share, down from its earlier projection of $8.70-$8.90/share.
CVS reported a 12.6% YoY revenue growth for its health services segment, which includes its pharmacy benefit manager CVS Caremark, medical clinics, telehealth, and home services. The segment saw a 3.7% increase in pharmacy claims due to a rise in cough, cold, and flu cases. CVS' health insurance segment, which includes Aetna, Medicaid, and dental and vision plans, generated a 12% YoY revenue growth. Total membership in CVS medical plans grew by 1.1 million, reaching 25.5 million.
Why it matters
In the first quarter of 2022, CVS' retail division, which comprises sales from its brick-and-mortar drugstores, infusion services, testing, and vaccine administration, reported a revenue of $27.92 billion, reflecting a 7.8% increase from the prior year. However, the company has revised its guidance downwards owing to expenses linked to recent acquisitions such as Signify Health and Oak Street Health, which amounted to $8 billion and $10.6 billion, respectively.