Shares of CVS Health Corp. (CVS) fell slightly in premarket trading on Wednesday following the release of their fourth-quarter results. While the company surpassed expectations by a significant margin, they decided to revise their full-year outlook due to elevated medical cost trends.
Financial Highlights
CVS reported a net income of $2.05 billion for the quarter, translating to $1.58 earnings per share. This is a decrease from the previous year’s $2.33 billion or $1.77 per share. However, when excluding nonrecurring items, adjusted earnings per share were $2.12, surpassing the FactSet consensus of $1.98.
Furthermore, CVS experienced remarkable revenue growth, with a total of $93.81 billion in the fourth quarter, surpassing the FactSet consensus of $90.58 billion. This growth can be attributed to higher health care benefits revenue, which rose by 16.1% to $26.73 billion. Additionally, health services revenue saw an increase of 12.3% to $49.15 billion, and pharmacy and consumer wellness revenue rose by 8.6% to $31.19 billion.
Revised Guidance for 2024
Although CVS Health Corp. achieved impressive financial results for Q4 2023, they have adjusted their guidance for 2024 due to an in-depth analysis of medical cost trends. They now expect their adjusted earnings per share for 2024 to be “at least $8.30,” down from their previous projection of “at least $8.50.” It is important to note that the current FactSet consensus stands at $8.47.
Stock Performance
Despite the revised guidance, CVS shares have performed well in the market. Over the past three months, the stock has gained 5%, while the S&P 500 has advanced by 13.2%.
CVS Health Corp. continues to evolve and adapt amidst changing trends in the health care industry. With their strong fourth-quarter results, albeit with a revised outlook, the company remains confident in their ability to deliver value to their shareholders and customers alike.
