Health Care

CVS sees revenue jump 35% in Q1, credits Aetna integration, healthcare sales

CVS sees revenue jump 35% in Q1, credits Aetna integration, healthcare sales”

CVS Health Corp. came out of the gate running in its first quarter with profit, revenue and same-store sales that beat expectations, and lifted its full-year outlook.

As for CVS' full year-guidance, the Company raised its adjusted earnings from between USD 6.68 to USD 6.88 to the range between USD 6.75 to USD 6.90 per share.

Net income also rose 43% to $1.4 billion from a year ago.

Overall, revenues for CVS increased 34.8% to $61.6 billion in the first quarter, operating income increased 34.8% to $2.7 billion, and adjusted operating income increased 56.8% to $3.6 billion.

Driven by major membership growth due to its addition of Aetna, CVS said its healthcare benefits segment increased revenues by $16.6 billion during the three-month period, to $17.8 billion.

Following the closure of CVS' acquisition of Aetna, the combined Company was able to report stronger financials for the quarter. CIBC restated a "market perform" rating on shares of CVS Health in a research report on Monday, April 15th. The main reasons behind this lower growth rate were a much larger income tax hit in the first quarter of 2019 versus the prior-year period, and a significant net interest expense related to financing the Aetna transaction recorded in the first quarter of 2018.

Revenue at CVS Health's pharmacy benefit management division went up 3.1% year-on-year to $33.56 billion during the latest quarter, as prices of brand name drugs rose. "In the quarter we continued to advance our integration efforts while beginning to launch new innovations such as our HealthHub concept stores".

In announcing the first quarter financial results, Menlo said, "We generated strong first quarter results, providing positive momentum to start the year".

Merlo did step lightly into the discussion on potential policy changes to the US healthcare system.

Looking ahead at Q2, CVS see adjusted earnings per share of $1.68 to $1.72, topping the $1.68 that was expected. "We remain relentlessly focused on creating value for clients and customers while driving both near and longer-term returns for our shareholders". That's right - they think these 10 stocks are even better buys. The company narrowed the range for 2019 GAAP EPS to between $4.90 and $5.05 from a range of $4.88 to $5.08. Several studies suggest that positive earnings surprises not only lead to an immediate hike in a stock's price, but also to a gradual increase over time. The company has a market capitalization of $69.50 billion, a PE ratio of 8.10, a PEG ratio of 1.05 and a beta of 0.94.



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