Revenues of healthcare company CVS Health (NYSE: CVS) rose sharply in the second quarter and exceeded the estimates. As a result, earnings moved up 12% and topped the Street view. The company also revised up its full-year guidance and the stock gained sharply early Wednesday.
Revenues climbed 35% annually to $63.4 billion, helped by a 4.2% growth in same-store sales. The top-line also surpassed Wall Street’s prediction. Revenues of the Pharmacy Services segment increased 4.2% during the three-month period and Retail revenue moved up 3.7%. The growth was driven mainly by contributions from the recently acquired Aetna and favorable drug prices in the main business segments.
At $1.89 per share, adjusted earnings were up 12% from the year-ago quarter. Analysts had forecast a smaller number. Second-quarter net income, on a reported basis, was $1.93 billion or $1.49 per share, compared to a loss of $2.56 billion or $2.52 per share in the same period of last year.
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“We posted strong second quarter results, with all of our businesses performing at or above expectations. These results demonstrate our ability to execute on our strategic priorities to accelerate enterprise growth as we seek to fundamentally transform the consumer health experience,” said CEO Larry Merlo.
Encouraged by the positive results, the management raised its full-year adjusted earnings guidance to $6.89-$7.00 per share from the earlier outlook of $$6.75 per share to $6.90 per share. The guidance for unadjusted earnings has been raised to the range of $4.93 per share to $5.04 per share from $4.90-$5.05 per share.
Related: CVS Health Q1 2019 Earnings Conference Call Transcript
The company currently
expects adjusted operating income in the range of $15.2 billion to $15.4
billion, which represents an increase from the previous outlook. Meanwhile, it
confirmed the forecast for operating income between $11.8 billion and $12.0
billion.
CVS Health’s stock plunged to a six-year low in May, after falling continuously since the beginning of the year. In the past twelve months, the shares lost about 19%.