CVS Health delivered a better-than-expected third quarter and raised its 2021 forecast again as more people returned to its drugstores for prescriptions or COVID-19 vaccinations.
The company said Wednesday it now expects 2021 adjusted earnings per share to range from $7.90 to $8.
That’s nearly a 3% hike at the midpoint of that range from the forecast it made in August, when some analysts criticized the company for a conservative guidance increase compared to how soundly the company beat expectations in the second quarter.
The latest forecast is greater than the annual per-share earnings of $7.79 that Wall Street has been projecting, according to a survey by FactSet.
In the third quarter, CVS Health posted adjusted earnings of $1.97 per share. That’s 10% higher than the average analyst forecast of $1.79 per share.
The company’s total revenue grew 10% to $73.8 billion, also surpassing expectations, and net income soared 30% to $1.59 billion.
CVS Health operates one of the nation’s largest drugstore chains with nearly 10,000 retail locations. It also runs prescription drug plans for big clients like insurers and employers through a large pharmacy benefit management business, and it sells health insurance.
Revenue from the company’s drugstores jumped 10% compared to last year’s quarter, when the pandemic was still keeping customers away from its stores. The chain delivered more than 11 COVID-19 vaccines in this year’s third quarter, a drop from the 17 million it delivered in the second quarter.
But analysts expected that after the initial rush to get vaccines when eligibility expanded last spring. Vaccination rates could begin climbing again due to booster shots and the recent decision to allow children to receive them.
CVS Health said COVID-19 vaccines, diagnostic testing and over-the-counter test kits contributed about 40% of the drugstore segment’s revenue increase.
Revenue from the company’s biggest business, its pharmacy benefits management segment, grew 9% to $39.05 billion, helped by more pharmacy claims and growth in price specialty drugs.
Total revenue also jumped nearly 10% for the company’s Aetna insurance business, which covers more than 23 million people. That segment also saw higher costs from COVID-19 related treatment claims.
Shares of CVS Health Corp., based in Woonsocket, Rhode Island, slipped less than 1% before the opening bell Wednesday. Those shares closed at $91.15 on Tuesday and have already climbed about 33% so far this year.
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