CVS Health Posts In-Line Q3 Earnings, But Issues Weak Profit Forecast

But for the current quarter, CVS forecast earnings of $1.51 to $1.55 a share. Analysts had been expecting $1.50 a share in earnings.

The average estimate among 58 Estimize users was for earnings of $1.31 per share and revenue of $37.79 billion.

For the third quarter ended September 30, CVS Health reported $38.6 billion in net revenues, representing an increase of 10.3%.

Chief Executive Officer and President Larry Merlo said in a press release: “I’m very pleased to report third quarter results that are at the higher end of our expectations”.

Contracts on the Standard & Poors 500 Index expiring in December rose 0.1 percent to 2,084.5 at 6:20 a.m.in New York, after earlier rising as much as 0.6 percent. CVS Caremark provides pharmacy services through its pharmacy benefit management (PBM), mail order and specialty pharmacy division, CVS Caremark Pharmacy Services; approximately 7,300 CVS/pharmacy retail stores; retail-based health clinic subsidiary, MinuteClinic, and its online retail pharmacy, CVS.com.

Full year adjusted EPS is now expected to come in the range of $5.14-5.18, excluding integration costs, acquisition related bridge financing.

As of September 30, CVS Health operated 7,911 retail drug stores in 44 states, the District of Columbia, Puerto Rico and Brazil.

Analysts forecast, on average earnings of $5.99 per share, according to FactSet. This range is in line with the company’s earlier provided five-year growth target (2013-2018) which projects adjusted EPS growth at a compounded annual rate of 10% to 14% for the period.

CVS Health posted yet another solid quarter with revenues exceeding the Zacks Consensus Estimate by a decent margin. The evolution was punctuated in recent months with its acquisition of Omnicare and a $1.9 billion purchase of Target Corp.’s pharmacy business.

In August, the Woonsocket, Rhode Island, company closed a more than $10-billion deal to buy the pharmaceutical distributor Omnicare, an acquisition that will give it national reach in dispensing prescription drugs to assisted living and skilled nursing homes, long-term care facilities, hospitals and other care providers. The buyout will expand CVS Health’s customer base, add a new retail channel for its products and augment customer convenience.

Currently, the stock carries a Zacks Rank #2 (Buy). BIOS and Diplomat Pharmacy, Inc.

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