While continuing to play a role in battling the pandemic, CVS Health’s third quarter brought increased revenue and earnings.
The Woonsocket, R.I.-based company saw third-quarter revenues up 10% year over year, totaling $73.8 billion and posting earnings per share of $1.20 — an increase of 29% over the prior-year period.
Total revenues year to date increased to $215.5 billion, an increase of 8.2% compared with the prior-year period. GAAP diluted earnings per share were $4.98 and adjusted earnings per share were $6.43.
Operating income decreased 5.8% and adjusted operating income increased 12.5% for the quarter compared with the prior year. The company attributed the decrease in operating income to a $431 million goodwill impairment charge associated with the long-term care business in the retail/long-term care segment and the absence of a $271 million gain on the sale of the Coventry Health Care Workers’ Compensation business. The decrease was partially offset by the increase in adjusted operating income.
CVS Health attributed the increase in operating income primarily to the administration of COVID-19 vaccinations, diagnostic testing and increased front store volume in the retail/LTC segment, as well as improved purchasing economics and growth in specialty pharmacy in the pharmacy services segment.
“We outperformed expectations once again and continue to lead the way in changing how, when and where care is delivered for millions of Americans,” said CVS Health president and CEO Karen Lynch. “Our services are responsive to evolving consumer needs, from administering millions of COVID-19 tests and vaccines to offering primary care accessible from virtually anywhere, and our touchpoints allow for unmatched impact.”
Adjusted operating income for the retail/long-term care segment increased 22% for the quarter compared with the prior year.
Prescriptions filled increased 8% on a 30-day equivalent basis for the quarter compared with the prior year. The increase was primarily driven by COVID-19 vaccinations, as well as the continued adoption of patient care programs and increased new therapy prescriptions, both of which were adversely impacted by the COVID-19 pandemic during the quarter. Excluding the impact of COVID-19 vaccinations, prescriptions filled increased 4.9% on a 30-day equivalent basis for the quarter compared with the prior year.
Revenues from the pharmacy services segment increased 9.3% for the quarter compared with the prior year. The pharmacy services segment’s adjusted operating income increased 9.5% for the quarter compared with the prior year. Total pharmacy claims processed increased 6.9% on a 30-day equivalent basis for the three months compared with the prior year.
Revenues from the healthcare benefits segment increased 9.5% for the three months, primarily driven by growth in the government services business.
The healthcare benefits segment’s operating income increased 2.4% for the quarter compared with the prior year.
CVS Health raised its full-year 2021 GAAP diluted EPS to range from $6.13 to $6.23 and from $6.35 to $6.45, and its full-year 2021 adjusted EPS guidance to range from $7.90 to $8.00 and from $7.70 to $7.80.
The company also raised its full-year 2021 cash flow from operations projections to be in the range of 13 billion to $13.5 billion from $12.5 billion to $13 billion.