CVS Well being Q3 earnings 2018

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Larry Merlo, president and chief executive officer of CVS Health Corp., speaks during an Economic Club of Washington discussion in Washington, D.C., U.S., on Monday, Oct. 15, 2018.
Andrew Harrer | Bloomberg | Getty Pictures

Larry Merlo, president and chief government officer of CVS Well being Corp., speaks throughout an Financial Membership of Washington dialogue in Washington, D.C., U.S., on Monday, Oct. 15, 2018.

An bettering pharmacy retail enterprise helped CVS Well being beat analysts’ third-quarter earnings and income expectations. The corporate additionally stated Tuesday it anticipates its acquisition of well being insurer Aetna to shut earlier than Thanksgiving.

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Shares of the corporate rose about 2 p.c.

Here is what the corporate reported in contrast with what Wall Road was anticipating, primarily based on a survey of analysts by Refinitiv:

  • Earnings per share: $1.73, adjusted, vs. $1.71 anticipated
  • Income: $47.three billion vs. $47.2 billion anticipated

CVS reported fiscal third-quarter web revenue of $1.39 billion, or $1.36 per share, up from $1.29 billion, or $1.26 per share a yr earlier. Excluding objects, CVS earned $1.73 per share, above the $1.71 per share anticipated by analysts surveyed by Refinitiv.

Income rose 2.four p.c to $47.three billion, surpassing expectations of $47.2 billion. For the enterprise unit that features CVS’ retail pharmacy operations, income elevated to $20.86 billion, up almost 7 p.c from the $19.59 billion within the year-ago quarter, pushed by an eight.four p.c surge in pharmacy income.

The corporate’s retail enterprise confirmed indicators of enchancment, with income from the so-called entrance retailer, which incorporates merchandise like make-up and nutritional vitamins, rising 2 p.c from final yr. Similar-store gross sales, a intently watched metric, had been up zero.eight p.c. Whereas the developments improved, they had been up towards simple comparisons.

“While this is a shallow gain, it is most definitely a step in the right direction,” stated Neil Saunders, managing director of GlobalData Retail. “However, our outlook on the retail side remains cautious, and we are split as to whether this represents the start of a new upside for CVS’ retail operation, or whether it is just an anomaly.”

Like different drugstores, CVS is looking for methods to lure customers who’re more and more procuring on-line. One resolution is likely to be CarePass, a membership program CVS is piloting in Boston.

To shake up its enterprise mannequin, CVS is within the midst of buying well being insurer Aetna for roughly $69 billion. CVS obtained preliminary approval from the Division of Justice in October to maneuver ahead with the deal. The corporate nonetheless wants a handful of states to clear the deal, together with New York, the place state officers are contemplating blocking components of it.

CVS on Tuesday stated it has obtained approval from 23 of the 28 states it has filed with and is “well down the line” with the remaining 5. The corporate expects to shut the deal earlier than Thanksgiving.

The corporate backed its full-year forecast of adjusted earnings of $6.98 to $7.08 per share. Analysts polled by Refinitiv count on $7.04 per share.

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Natalia Camp

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