CVS Health Reaffirms 2023 Adj. EPS Guidance; Q4 Adj. Operating Profit Declines

CVS Health Corp. (CVS) issued its full-year 2023 GAAP EPS guidance range of $7.73 to $7.93 and reaffirmed its full-year adjusted EPS guidance range of $8.70 to $8.90. The company also issued its full-year 2023 cash flow from operations guidance range of $12.5 billion to $13.5 billion.

The company’s long-term EPS growth targets include: approximately $9.00 for 2024; and approximately $10.00 + upside based on successful resolution of Medicare Stars
Ratings mitigation efforts for 2025. The company noted that its shareholder dividend would be aligned with earnings growth.

CVS Health Corp. reported fourth quarter adjusted earnings per share of $1.99 compared to $1.98, prior year. Analysts on average had expected the company to earn $1.92 per share, according to figures compiled by Thomson Reuters. Analysts’ estimates typically exclude special items. Adjusted operating income declined to $4.01 billion from $4.15 billion, last year, primarily driven by declines in the Retail/LTC and Corporate/Other segments, largely offset by increases in the Health Care Benefits and Pharmacy Services segments.

Net income totaled $2.30 billion, or $1.75 per share compared with $1.31 billion, or $0.98 per share, in last year’s fourth quarter.

The company’s revenue for the quarter rose 9.5% to $83.85 billion from $76.60 billion last year. Analysts on average had estimated $76.21 billion in revenue.

Separately, CVS Health and Oak Street Health (OSH) have entered into a definitive agreement under which CVS Health will acquire Oak Street Health in an all-cash deal at $39 per share, representing an enterprise value of approximately $10.6 billion. Oak Street Health employs approximately 600 primary care providers and has 169 medical centers across 21 states.

Together, CVS Health and Oak Street Health plan to create a premier multi-payor Medicare Value-Based Care platform. Mike Pykosz will continue to lead Oak Street Health.

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