Key Takeaways
- CVS Health reports second-quarter earnings ahead of the opening bell Wednesday, after its first-quarter results sent the company’s stock to its worst day of the year.
- CVS’s Q2 revenue is expected to rise and profit is seen falling from last year, as the pharmacy and health insurer has cited higher medical costs.
- CVS has lowered its full-year earnings per share (EPS) projections in its last two reports.
Pharmacy giant CVS Health (CVS) reports second-quarter earnings ahead of the opening bell Wednesday, after its first-quarter results sent the company’s stock sinking nearly 17%, its worst day of the year.
Analysts project second-quarter revenue of $91.54 billion, up from $88.92 billion a year ago, according to estimates compiled by Visible Alpha. Similar to its first-quarter result, analysts expect profit to shrink despite higher revenue, which CVS has previously attributed to elevated costs from health insurance claims.
| Analyst Estimates for Q2 2024 | Q1 2024 | Q2 2023 | |
| Revenue | $91.54 billion | $88.44 billion | $88.92 billion |
| Diluted EPS | $1.34 | 88 cents | $1.48 |
| Net Income | $1.69 billion | $1.12 billion | $1.91 billion |
Key Metric: Net Income
CVS lowered its projections for full-year earnings per share (EPS) in its last two earnings reports, citing higher-than-expected payouts for insurance claims as Americans undergo procedures covered by insurance at a greater rate than during the pandemic. The company said in each report that it was likely that medical costs could continue to be an issue.
In its first-quarter report, CVS said it was lowering profit and cash-flow guidance “to reflect the assumption that the majority of this pressure will persist throughout 2024.”
Business Spotlight: Health Insurance Costs, Medicare Advantage Star Rating
CVS reported a medical benefit ratio (MBR) that was nearly 6% higher year-over-year in the first quarter, thanks to the higher medical costs that the company attributed to increased Medicare use and “the unfavorable impact” of the company’s Medicare Advantage star ratings.
Medical costs remaining high in CVS Health’s second-quarter report could again cut into the company’s profit margins and its stock price.
CVS shares rose 1.3% to $58.57 by 3 p.m. ET Tuesday but have lost more than a quarter of their value so far this year.