CVS Health raises forecasts as insurance business, COVID test boosts second quarter earnings

Taken May 3, 2022, this illustration shows the CVS Health logo. REUTERS/Dado Ruvic/Illustration

Aug 3 (Reuters) – CVS Healthscope (CVS.N) on Wednesday revised its full-year earnings forecast after a strong insurance business and sales of COVID-19 over-the-counter test kits helped boost quarterly earnings. I pulled it up.

Shares of America’s largest pharmacy chain were up about 3% ahead of Bell.

The company’s retail and care segment revenues increased 6.3% to $26.3 billion. This is because sales of OTC antigen COVID test kits and the impact of the flu season offset the impact of reduced COVID-19 vaccination and diagnostic testing.

Pharmacy chain operators such as CVS have benefited from distributing COVID vaccines and tests during the pandemic, and the surge in infections caused by Omicron has increased demand for OTC tests in the fourth quarter.

However, government data show that overall cases in the U.S. have stabilized, with more than two-thirds of people fully vaccinated and about 48% receiving boosters, so laboratory testing and vaccination demand has slowed.

The company’s health insurance segment revenues increased 11% to $22.8 billion, and the medical benefits or cost to premium ratio fell from 84.1% to 82.9%. This allows the company to keep costs down.

CVS increased its adjusted earnings guidance to $8.40-8.60 per share from $8.20-8.40.

Net income for the quarter ended June 30 was $2.96 billion, or $2.23 per share, up from $2.79 billion, or $2.10 per share, in the year-ago quarter.

Total revenue increased to $80.6 billion from $72.6 billion a year ago.

By Leroy Leo and Bhanvi Satija of Bangalore. Edited by Vinay Dwivedi

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