The CVS Health logo is seen displayed in this illustration taken on May 3, 2022. REUTERS/Dado Ruvic/Illustration
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Aug 3 (Reuters) – CVS Health Corp ( CVS.N ) on Wednesday raised its annual profit forecast after strength in its insurance business and sales of over-the-counter COVID-19 testing kits helped lift quarterly earnings.
Shares in the largest U.S. drugstore chain rose about 3% before the bell.
The company’s retail and long-term care segment revenue rose 6.3% to $26.3 billion, as sales of OTC COVID-19 antigen testing kits and the impact of the flu season helped offset the effect of lower vaccinations for COVID-19 and diagnostic testing.
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Chain pharmacy operators such as CVS have benefited from distributing COVID vaccines and tests during the pandemic, with a spike in infections driven by Omicron boosting demand for its OTC tests in the quarter.
Demand for lab tests and vaccinations, however, slowed as overall cases in the United States remained stable, with more than two-thirds of people fully vaccinated and about 48% having received a booster dose, according to the data. to govern.
Revenue in the company’s health insurance unit rose 11% to $22.8 billion while the medical benefits ratio, or costs as a percentage of premiums, fell to 82.9% from 84.1% as demand for routine, non-elective medical care recovered with a slower-than-expected pace, allowing the company to rein in costs.
CVS raised its adjusted earnings outlook to $8.40-$8.60 per share from the $8.20-$8.40 per share it had previously forecast.
Net income for the quarter ended June 30 rose to $2.96 billion, or $2.23 per share, from $2.79 billion, or $2.10 per share, a year earlier.
Total revenue rose to $80.6 billion from $72.6 billion a year earlier.
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By Leroy Leo and Bhanvi Satija in Bengaluru; Editing by Vinay Dwivedi
Our Standards: The Thomson Reuters Trust Principles.
