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Key Takeaways
- CVS Health reported better-than-expected quarterly results, and the new CEO made executive changes. The news lifted the stock Wednesday.
- Revenue was lifted by jumps in sales at the firm’s Pharmacy & Wellness and Health Care Benefits segments.
- CVS also shook up its executive lineup, adding former UnitedHealth Group executive Steve Nelson to run the Aetna insurance division.
CVS Health (CVS) shares surged after the pharmacy chain and healthcare company posted better-than-expected results and new CEO David Joyner made leadership changes as he moves to shake up the struggling firm.
On Wednesday, CVS reported third quarter earnings per share (EPS) of $1.09, with revenue rising 6.3% to $95.4 billion. Both revenue and EPS exceeded estimates.
Despite today’s gains of about 10%, shares of CVS Health have lost about a fifth of their value this year.
Revenue was boosted by the Pharmacy & Wellness division, which saw sales up 12% to $32.4 billion, aided by higher prescription volume, Sales at the Health Care Benefits segment advanced some 25% to $33 billion on growth in Medicare and commercial product lines.
The company said Health Services unit revenue dropped 5.9%, chiefly because of the loss of a large client and continued pharmacy client price improvements. Reuters in January reported that Tyson Foods (TSN) replaced CVS Health with Rightway to manage employee drug benefits.
Joyner took over as CEO last month. CVS in a separate statement said former UnitedHealth Group (UNH) executive Steve Nelson will become head of its Aetna insurance arm, and Prem Shah, the current chief pharmacy officer and president of the Pharmacy & Consumer Wellness division, will become group president.
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