CVS Health (CVS) Q2 2022 results
People walk past a CVS Pharmacy store in the Manhattan borough of New York.
Shannon Stapleton | Reuters
CVS Health on Wednesday raised its earnings outlook for the year, after beating Wall Street expectations for the fiscal second quarter.
The healthcare company said it now expects adjusted earnings per share for the full year to be between $8.40 and $8.60, down from its previous estimate of between 8. $20 and $8.40.
The shares rose about 4% in premarket trading.
Here’s what the company reported for the three months ended June 30, compared to what analysts expected, based on an analyst survey by Refinitiv:
- Earnings per share: $2.40 adjusted vs $2.17 expected
- Revenue: $80.64 billion vs. $76.37 billion expected
On an unadjusted basis, CVS reported net income of $2.95 billion, or $2.23 per share, higher than $2.78 billion, or $2.10 per share, a year earlier. Revenue of $80.64 billion also marked a year-over-year increase, versus $72.62 billion over the same period in 2021.
The results encompass the different slices of CVS in the healthcare sector. It has a huge pharmacy footprint, owns insurer Aetna and pharmacy benefits manager CVS Caremark, and provides patient care through MinuteClinics inside its stores.
CEO Karen Lynch said the company’s strategy of adding more health services is driving sales and deepening customer relationships.
“Despite a challenging economic environment, our differentiated business model helped drive strong results this quarter, with significant revenue growth across all of our business segments,” she said in a press release.
Same-store sales were up 8% year-on-year as customers bought home Covid test kits and cough, cold and flu medicines. That far exceeded the expected decline in same-store sales of 0.3%, according to consensus estimates from StreetAccount.
In pharmacies, same-store sales increased by 7.6%. In the store front, same-store sales jumped 9.4%.
The total number of pharmaceutical claims processed increased by 3.9% on a 30-day equivalent basis for the three months ended June 30 compared to the previous year. This was driven by an extended cough, cold and flu season compared to the same quarter in 2021.
Pandemic related sales
While sales increased for the quarter, CVS said in a press release that the growth was partially offset by a drop in Covid tests and vaccinations, the introduction of new generic drugs and pressure on pharmacy reimbursements. .
CVS administered more than 4 million Covid tests and around 6 million Covid vaccinations during the three-month period, Lynch said on an earnings call. That’s down from more than 6 million tests and more than 8 million vaccines administered in the first quarter.
One aspect of Covid care has increased, however: Lynch said demand continues to rise for antiviral drugs to treat Covid infections.
Pandemic-related services remain an important business for CVS, even as testing and vaccination volumes decline.
Chief Financial Officer Shawn Guertin said the company expects to administer nearly 20 million Covid vaccines this year, with around 75% already administered. It said it expected to supply around 19 million tests and sell more than 50 million over-the-counter test kits, more than double the number sold the previous year.
In total, he said these three categories will generate nearly $3 billion in revenue, down about 33% from the previous year. He said CVS was prepared to spend more in the second half of the year as it prepared for a potential spike in Covid cases.
Read the company’s earnings release here.
This is a developing story. Please check for updates.