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CVS Health's fourth-quarter profit fell as the drugstore chain and pharmacy benefits manager dealt with increased operating costs. Still, its adjusted profit and revenue beat Wall Street's estimates.
The Woonsocket, Rhode Island-based company also trimmed its full-year adjusted earnings forecast, citing the possibility of higher medical costs.
For the three months ended Dec. 31, CVS Health earned $2.05 billion, or $1.58 per share. A year earlier, it earned $2.33 billion, or $1.77 per share.
Stripping out certain items, earnings were $2.12 per share. This topped the $2.01 per share that analysts polled by Zacks Investment Research were calling for.
Revenue climbed to $93.81 billion from $83.85 billion, beating analysts' estimates for revenue of $90.8 billion.
Shares rose slightly before the market open on Wednesday.
CVS Health Corp. runs one of the nation’s largest drugstore chains and a huge pharmacy benefit management business that operates prescription drug coverage for big clients like insurers and employers.
It also sells health insurance through its Aetna arm, and the company has been providing a growing amount of care through its stores and clinics.
Company leaders were preaching caution last fall about the outlook for 2024. They told analysts then that a decline in ratings for the company’s Medicare Advantage health insurance plans would hurt that business.
Medicare Advantage plans are privately run versions of the government’s Medicare program mostly for people age 65 and older. Those plans have seen a spike in care use that started developing last year.
CVS Health officials said in November that investors should ground their expectations for 2024 adjusted earnings at the low end of a range of $8.50 to $8.70 per share. That’s also what the company expected for full-year, 2023 earnings. CVS Health now foresees 2024 adjusted earnings of at least $8.30 per share.
Analysts surveyed by FactSet predict full-year earnings of $8.47 per share.
The pharmacy industry has been dealing with several issues of late, including rising costs, employee protests and opioid-related lawsuits. In October drugstore workers around the country started called in sick to highlight a lack of support from their employers. Pharmacists and technicians — mostly for Walgreens and other big retailers like CVS Health — were involved.
That same month, Rite Aid filed for bankruptcy protection and announced plans to sell part of its business as it attempts to restructure while dealing with losses and opioid-related lawsuits.
