COVID-19 vaccines, prescriptions fuel strong quarter at CVS
COVID-19 vaccines and the return of customers to stores to pick up prescriptions helped push CVS Health well past fourth-quarter earnings expectations.
But the drugstore chain and pharmacy benefit manager did not raise the 2022 forecast it laid out in December, and shares slid in early-morning trading Wednesday.
Profit at the Woonsocket, Rhode Island, company jumped 33% to nearly $1.3 billion in the final quarter of 2021.
CVS Health said its biggest revenue generator, the pharmacy benefit management business, processed more pharmacy claims due partly to COVID-19 vaccinations and an increase in new prescriptions compared to the final quarter of 2020.
Vaccines had just started rolling out at the end of 2020, and many people were still staying home and trying to avoid the virus by staying away from doctor's offices that generate those prescriptions.
The pharmacy benefit management business runs prescription drug plans for large employers and other big clients. CVS Health also saw the number of prescriptions filled in another key part of is business — drugstores — jump more than 11% in the final quarter of 2021.
The company also administered more than 20 million COVID-19 vaccines and more than 8 million tests for the virus in the quarter.
CVS Health operates one of the nation’s largest drugstore chains with nearly 10,000 retail locations. It also sells health insurance through its Aetna operation that provides coverage for more than 23 million people.
That segment saw revenue jump 8% as it added more customers with government-funded Medicare Advantage or Medicaid coverage. It also spent less on COVID-19 testing and treatment.
The company also booked a charge of about $1.4 billion in the quarter tied to a plan announced in November to close several hundred stores over the next few years. The company said it was adjusting for population shifts and customer needs.
Overall, CVS Health Corp. posted adjusted earnings of $1.98 per share in the final quarter of 2021, as total revenue grew 10% to $76.6 billion.
Analysts expected earnings of $1.83 per share on $75.66 billion in revenue, according to FactSet.
CVS Health said in December that it expected adjusted earnings of $8.10 to $8.30 per share in 2022.
Analysts expect, on average, earnings of $8.27 per share.
Company shares fell nearly 3% to $107.60 in pre-market trading.