A view outside a CVS Pharmacy store on July 16, 2020 in Miramar, Florida.
Johnny Louis | Getty Images
CVS Health on Wednesday outpaced analysts’ expectations for fiscal second-quarter earnings and raised its forecast for the year, as customers returned to doctors offices and more typical shopping patterns.
Yet shares of the company fell by 4.8% in premarket trading as CVS said it will focus on making investments for future growth rather than increasing dividend payments or share buybacks. CVS said it will increase employee wages, expand health services at stores and add more digital options for customers.
The drugstore chain and health insurer said its business has begun to normalize, as customers buy more items in the front of the store and pharmacists fill more prescriptions. It said use of health-care benefits has returned to a more typical pattern, too, as people resume medical visits and procedures.
Same-store sales rose 12.3% in the second quarter from a year earlier.
However, amid rising Covid-19 cases and the spread of the delta variant, CEO Karen Lynch said CVS remains committed to expanding vaccine access and outreach.
The company said it administered nearly 17 million Covid vaccines and more than 6 million tests in the second quarter.
Here’s what the company reported for the three-month period ended June 30, compared with what analysts were expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: $2.42 adjusted vs. $2.06 expected
- Revenue: $72.62 billion vs. $70.3 billion expected
CVS reported second-quarter net income of $2.78 billion, or $2.10 per share, down from $2.98 billion, or $2.26 per share, a year earlier.
Excluding items, it earned $2.42 per share, more than the $2.06 per share expected by analysts surveyed by Refinitiv.
The company’s revenue jumped to $72.62 billion from $65.34 billion a year earlier, topping analysts’ expectations of $70.3 billion.
CVS raised its guidance for the year. It said it expects 2021 earnings will range between $6.35 and $6.45, and after adjustments between $7.70 to $7.80 per share.
As of Tuesday’s close, shares of CVS were up about 23% this year. Shares closed on Tuesday at $84.00, bringing the company’s market value to $110.59 billion.