Benzinga - by Vandana Singh, Benzinga Editor.
On Wednesday, CVS Health Corp (NYSE:CVS) reported fourth-quarter adjusted EPS of $2.12, beating the consensus of $1.99, up from $2.04 a year ago.
Highlighting investors’ concerns about rising healthcare costs for insurers, Bloomberg noted that the worst was feared for CVS Health, like its peers Humana Inc (NYSE:HUM) and UnitedHealth Group Inc (NYSE:UNH).
CVS’s recent results indicate that its insurance unit effectively handled the escalating costs, contributing to positive quarterly performance.
The pharmacy chain reported sales of $93.81 billion, up 11.9% Y/Y, beating the consensus of $90.36 billion.
Health Care Benefits segment, the company’s insurance unit, reported sales of $26.73 billion, up 16.1%.
The medical benefit ratio was 88.5% in the fourth quarter, up from 85.8% a year ago.
Total Medical Membership increased by 5.2% to 25.7 million, reflecting broad-based growth in Individual Exchange, Medicare, and Commercial products.
Guidance: CVS Health revised its fiscal year 2024 adjusted EPS guidance to at least $8.30 from earlier guidance of at least $8.50 versus the consensus of $8.47, reflecting the impact of higher-than-expected Medicare Advantage utilization observed at the end of 2023.
The company forecasts fiscal year 2024 sales of at least $371.3 billion, up from at least $366.0 billion expected earlier versus consensus of $362.99 billion.
Cash flow from operations will be at least $12 billion, down from an earlier outlook of at least $12.5 billion.
The company expects sales of at least $125.1 billion for the Healthcare Benefit segment, compared to at least $119.8 billion expected earlier, and a Medical Benefits Ratio of ~87.7% versus ~87.2% (prior). Sees Total Medical Membership of ~26.9 million.
Also Read: CVS Health Adapts to Market Shifts With Pharmacy Shutdowns Within Target Stores.
Price Action: CVS shares are up 3.17% at $76.10 on the last check Wednesday.
Photo via Wikimedia Commons
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