Biotech
Wednesday, February 7th, 2024 4:02 pm EDT
Key Points
- CVS Health reported fourth-quarter revenue and adjusted earnings exceeding expectations, but it reduced its full-year profit outlook due to higher medical costs affecting the insurance industry.
- The company lowered its 2024 adjusted earnings forecast to at least $8.30 per share and unadjusted earnings guidance to at least $7.06 per share, citing a review of medical cost trend analysis and potential implications for 2024.
- CVS’s health services segment saw significant revenue growth, driven by specialty pharmacy services, brand inflation, and recent acquisitions, while its health insurance segment generated a roughly 16% increase in revenue, although sales fell short of analysts’ estimates.
CVS Health’s fourth-quarter earnings report revealed revenue and adjusted earnings that surpassed expectations, yet the company downgraded its full-year profit outlook due to heightened medical costs affecting the broader insurance industry. The adjusted earnings forecast for 2024 was lowered to at least $8.30 per share, down from a previous guidance of $8.50 per share, while the unadjusted earnings guidance was revised to at least $7.06 per share from at least $7.26 per share. CVS attributed this adjustment to a review of its medical cost trend analysis for the fourth quarter, anticipating continued elevated medical cost trends in 2024. Despite the positive earnings report, concerns about increased medical costs impacted market perception, prompting a decrease in CVS’s stock value. The company’s health services segment experienced significant revenue growth, driven by strengths in specialty pharmacy services, brand inflation, and recent acquisitions. However, sales in the health insurance segment fell short of analysts’ estimates, with an increase in the medical benefit ratio impacting profitability. CVS emphasized growth in prescription volume, brand inflation, and increased contributions from vaccinations within its pharmacy and consumer wellness division, although same-store sales varied across different segments of the business.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/02/07/cvs-heath-cvs-q4-2023-earnings.html
