Investment accounts
Adult accounts
Child accounts
Choosing Fidelity
Choosing Fidelity
Why invest with us Current offers Fees and charges Open an account Transfer investments
Financial advice & support
Fidelity’s Services
Fidelity’s Services
Financial advice Retirement Wealth Management Investor Centre (London) Bereavement
Guidance and tools
Guidance and tools
Choosing investments Choosing accounts ISA calculator Retirement calculators
Share dealing
Choose your shares
Tools and information
Tools and information
Share prices and markets Chart and compare shares Stock market news Shareholder perks
Pensions & retirement
Pensions, tax & tools
Saving for retirement
Approaching / In retirement
Approaching / In retirement
Speak to a specialist Creating a retirement plan Taking tax-free cash Pension drawdown Annuities Investing in retirement Investment Pathways
CVS Health shares fall on earnings miss, lowered outlook
(Sharecast News) - Shares in pharmacy giant CVS Health were falling on Wednesday, after its first-quarter results fell short of expectations, with both revenue and adjusted earnings missing the mark. The company also revised its full-year profit forecast downward due to escalating medical costs impacting the wider US insurance sector.
For the first quarter, CVS reported adjusted earnings per share of $1.31, falling short of the expected $1.69, and revenue of $88.44bn, slightly below the anticipated $89.21bn.
Net income for the quarter was $1.12bn, or 88 cents per share, compared to $2.14bn, or $1.65 per share, for the same period last year.
While pharmacy and insurance unit sales saw growth, CVS said it was facing challenges in its health services segment.
Sales in that division, including pharmacy benefit manager Caremark, declined due to the loss of a large client.
Recent decisions by companies like Tyson Foods and Blue Shield of California to switch pharmacy benefit managers had added pressure to CVS and other established players in the industry.
It said it now anticipated adjusted earnings of at least $7 per share for 2024, a significant decrease from the previously-projected $8.30 per share.
Analysts surveyed by LSEG had pencilled in full-year adjusted profits of $8.28 per share.
CVS also revised its unadjusted earnings guidance to at least $5.64 per share, down from at least $7.06 per share.
The company put its lowered outlook down to persisting higher medical costs, particularly within its insurance arm, throughout the year.
CVS owns major US health insurer Aetna.
Rising medical costs, notably driven by an uptick in procedures postponed during the pandemic, were affecting insurers across the US market.
CVS said its health insurance segment saw a substantial revenue increase, but reported lower-than-expected adjusted operating income.
The medical benefit ratio, indicating the balance between premiums collected and benefits paid out, rose to 90.4%, driven by increased use of Medicare Advantage and other factors.
At 0852 EDT (1352 GMT), shares in CVS Health Corporation were down 13.16% in premarket trading in New York, at $58.80.
Reporting by Josh White for Sharecast.com.
Share this article
Related Sharecast Articles
Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.
Award-winning online share dealing
Search, compare and select from thousands of shares.
Expert insights into investing your money
Our team of experts explore the world of share dealing.
Policies and important information
Accessibility | Conflicts of interest statement | Consumer Duty Target Market | Consumer Duty Value Assessment Statement | Cookie policy | Diversity and Inclusion | Doing Business with Fidelity | Fidelity gender pay report | Investing in Fidelity funds | Legal information | Modern slavery | Mutual respect policy | Privacy statement | Remuneration policy | Security | Statutory and Regulatory disclosures | Whistleblowing policy
Please remember that past performance is not necessarily a guide to future performance, the performance of investments is not guaranteed, and the value of your investments can go down as well as up, so you may get back less than you invest. When investments have particular tax features, these will depend on your personal circumstances and tax rules may change in the future. This website does not contain any personal recommendations for a particular course of action, service or product. You should regularly review your investment objectives and choices and, if you are unsure whether an investment is suitable for you, you should contact an authorised financial adviser. Before opening an account, please read the ‘Doing Business with Fidelity’ document which incorporates our client terms. Prior to investing into a fund, please read the relevant key information document which contains important information about the fund.
This website is issued by Financial Administration Services Limited, which is authorised and regulated by the Financial Conduct Authority (FCA) (FCA Register number 122169) and registered in England and Wales under company number 1629709 whose registered address is Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RP.