CVS Health swings to profit in 4th quarter

CVS pharmacy

CVS pharmacy

According to Refinitiv, experts had anticipated $63.97 billion in revenue in the fourth quarter versus a much higher $66.9 billion that the company reported on Wednesday. Adjusted earnings were $1.73 a share. Excluding the charge and other non-recurring items, adjusted earnings per share were $2.14, beating analysts' estimates of $1.68. In the same period of previous year, CVS said it had $2.14 in EPS on revenue of $54.42 billion.

Health Care Benefits revenue more than doubled to $17.15 billion, up from $6.24 billion a year ago.

CVS also expects its cash flows from operations to be between $10.5 billion to $11 billion. The segment's medical-loss ratio, which represents the share of premiums paid out in claims, was 85.7% for the quarter. Adjusted earnings for CVS in the fourth quarter were recorded at $1.75 billion versus $419 million in loss posted in the same quarter past year.

Ahead of its earnings report, CVS announced that the company invested $67 million in affordable housing during 2019, an investment that is expected to rise to $75 million in 2020.

Revenues for CVS' retail and long-term care segment grew at a lower level than its pharmacy segment in Q4 2019 but posted an operating income of $$1.9 billion, a marked improvement over its net loss of $270 million in Q4 2018.

Same-store sales for CVS's pharmacy business rose 4.1% year-over-year in the fourth quarter. It sees operating income of $12.8 billion to $13 billion, or $15.5 billion to $15.8 billion on an adjusted basis.

Former Aetna Chief Executive Mark Bertolini last week resigned from the CVS board after CVS said he wouldn't stand for re-election later this year, in a show of tension underlying one of the biggest USA health-care mergers.

CVS Health recently acquired Aetna (health insurer) for $70 billion last September.

Investors have also pushed down shares of insurers over political concerns, as Democratic presidential candidates push for a revamp of the US health-care system.

Shares of CVS are higher in early trading Wednesday.

-Anna Wilde Matthews contributed to this article.

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