:max_bytes(150000):strip_icc()/GettyImages-2161179281-de01144c2e4349f8a6aa527b2269c620.jpg "CVS Cuts Its Full-Year Profit Outlook, Again")
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KEY TAKEAWAYS
- CVS Health shares lost ground in early trading Wednesday after the pharmacy giant slashed its 2024 earnings guidance again amid increased medical costs.
- The company reported revenue for the second quarter that missed analysts’ estimates, though earnings per share beat projections.
- CVS also announced the departure of the head of its Aetna unit.
CVS Health (CVS) shares lost ground in early trading Wednesday after the pharmacy giant slashed its 2024 earnings guidance again amid increased medical costs and announced the departure of the head of its Aetna unit.
The company lowered its 2024 guidance for earnings per share (EPS) for a third straight quarter, to a range of $4.95 to $5.20 from at least $5.64 previously.
CVS reported second-quarter revenue of $91.23 billion, up 2.6% from a year ago, but below forecasts, while EPS of $1.41 beat projections.
Medicare Claims, Drop in Star Ratings Hit Results
CVS struggled with a rise in Medicare claims during the quarter, and a drop in its star ratings for those plans. Medicare and Medicaid are both government-run programs that help cover health care costs, with Medicare open to Americans 65 and older or who meet certain criteria.
Aetna President Leaves
The company also said that “based on the current performance and outlook for the Health Care Benefits segment,” Aetna President Brian Kane is leaving, and CVS CEO Karen Lynch will take over management of the business and oversee it with CFO Tom Cowhey.
CVS shares were down 2% at $57.06 in early trading Wednesday following the news and have lost over 27% of their value so far this year.