CVS Health beat analysts’ earnings and revenue estimates for the third quarter amid a rise in its pharmacy revenue. The retailer, which also said it foresees its Aetna acquisition to close prior to Thanksgiving, reported earnings per share of $1.73 and revenues of $47.3 billion compared to estimates of $1.71 and $47.2 billion respectively, CNBC reported.
GlobalData Retail Managing Director Neil Saunders said, according to CNBC, “While this is a shallow gain, it is most definitely a step in the right direction. 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.”
The CVS unit that encompasses its retail pharmacy business saw revenues rise by almost 7 percent to $20.86 billion from the year-ago quarter figure of $19.59 billion. At the same time, the retailer’s front store business that offers items such as vitamins and makeup had its revenue rise 2 percent from 2017. In addition, same-store sales rose almost 1 percent — or 0.8 percent.
And, in the second quarter, CVS Health also posted better-than-expected second-quarter earnings even though had fewer customers buying products in the front of its brick-and-mortar stores, the pharmacy retailer. The company reported adjusted earnings-per-share of $1.69 and revenues of $46.7 billion compared to analysts’ estimates of $1.61 and $46.4 billion respectively.
Through a statement, CVS CEO Larry Merlo said at the time, “the strong revenue, adjusted EPS, gross and operating margins, along with cash flow generated in the quarter, were the direct result of our team’s ability to increase prescription growth by expanding relationships with PBMs [pharmacy benefit managers] and health plans, as well as our ongoing streamlining efforts and innovation.”
Revenue from the retailer’s pharmacy segment rose from 5.7 percent from the same quarter a year ago — boosted by an 8.3 percent jump in pharmacy revenue — and topped $20.7 billion. However, front-end sales revenue, which encompasses products such as household items and greeting cards, increased by only 0.2 percent.