Here’s how the pharmacy giant performed compared to Wall analysts’ estimates, according to Refinitiv: Earnings per share $2.09 vs. $1.99, expected. Revenue $81.16 billion vs. $76.75 billion, expected. It’s the third consecutive quarter in which CVS beat earnings expectations. Revenue rose 10% year-over-year.
The retail and long-term care segment saw revenue increase nearly 7%, but its profit decreased due largely to a decline in demand for Covid tests and vaccines. CVS’ Health Care Benefits segment grew nearly 10% compared to the same quarter last year, driven in part by an increase in its medical memberships from 2021.
Pharmacy services revenue increased over 10% compared to the period last year, as total claims processed increased by more than 3.6%, with gains offest by a decline in Covid vaccinations. The company on Wednesday also reported a $5.2 billion charge in the third quarter for a settlement relating to its role in the opioid crisis. According to CVS, the settlement resolves all existing claims against the company relating to opioid distribution.
Shares were up around 4% in Wednesday morning trading. The company raised its full year outlook for the second consecutive quarter. Now, the company expects an adjusted earnings per share for the full year of between $8.55 and $8.65, up from the range of $8.40 to $8.60 that it announced in August atop healthy traffic and Covid-related anti-viral drug sales.
CVS encompasses a large swath of health care services, including its prescription and over-the-counter medicine sales, its MinuteClinic patient care services and its pharmacy benefits manager, CVS Caremark. The company also owns Aetna, a managed health insurance company.
The retailer has signaled a renewed focus on health care this quarter, announcing its purchase of Signify, an at-home health care company, for $8 billion in September. That deal is expected to be completed in the first half of 2023, CVS said during its Wednesday morning earnings call.
CVS is continuing its expansion efforts with its health care business. CEO Karen Lynch said on Wednesday that the company is looking for a suitable acquisition target to provide primary care services. The move mirrors Amazon and Walgreens own expansions further into health care services. Amazon is acquiring One Medical, a chain of boutique doctor’s offices, for $3.9 billion. Walgreens is currently opening doctors offices in a partnership with Village MD.
CVS said it would pay $5 billion over the next 10 years to states, tribes and others to settle opioid claims. The settlement would cover all claims relating the retailers’ contribution to the opioid epidemic, according to the company. Walgreens announced its own broad settlement totaling $4.95 billion to be paid out over 15 years. Walmart reportedly settled alongside CVS, according to Reuters.
In September, CVS agreed to pay a $82.5 million settlement to West Virginia for its role in fueling the opioid crisis in the Mountain State. The pharmacy was accused of lax oversight of the prescription pills it sold.