A peek outside a CVS pharmacy store on July 16, 2020 in Miramar, Florida.
Johnny Louis | Getty Images
CVS Health exceeded analyst expectations for second quarter results on Wednesday and increased its guidance for the year as customers returned to doctor’s offices and more typical shopping patterns.
Still, the company’s shares fell 4.8% in early trading as CVS said it will focus on investing for future growth rather than increasing dividend payments or share buybacks. CVS said it will increase employee wages, expand health services in stores, and add more digital options to customers.
The drugstore chain and health insurer said their business has started to normalize as customers buy more items in front of the store and pharmacists fill out more prescriptions. It is also said that health service use has returned to a more typical pattern as people resume medical visits and procedures.
Revenue in the same store increased 12.3% year over year in the second quarter.
However, with Covid-19 cases rising and the proliferation of the Delta variant, CEO Karen Lynch said CVS remains committed to expanding the access and reach of vaccines.
The company said it ran nearly 17 million Covid vaccines and more than 6 million tests in the second quarter.
Here’s what the company reported for the three months ended June 30, compared to analyst expectations based on an analyst survey conducted by Refinitiv:
- Earnings per share: $ 2.42 adjusted vs. $ 2.06 expected
- Revenue: $ 72.62 billion versus $ 70.3 billion expected
CVS reported net income of $ 2.78 billion, or $ 2.10 per share, for the second quarter, compared to $ 2.98 billion or $ 2.26 per share last year.
Without items, it made $ 2.42 per share, more than the $ 2.06 per share that Refinitiv polled analysts had expected.
Revenue rose to $ 72.62 billion from $ 65.34 billion a year ago, beating expectations of $ 70.3 billion.
CVS raised its guidance for the year, expecting earnings per share of $ 6.35 to $ 6.45 in 2021 and, after adjustments, of $ 7.70 to $ 7.80.
At the close of trading on Tuesday, CVS’s shares were up approximately 23% that year. The shares closed at $ 84 on Tuesday, bringing the company’s market value to $ 110.59 billion.
Read the full press release here.