CVS Health exceeded Wall Street’s expectations for the second quarter and raised its full-year earnings forecast once again, showing strong momentum under its new leadership after a rough 2024.
The company reported that more prescriptions were filled at its pharmacies, and its health insurance division delivered solid results, driving improved performance overall.
CVS Health now projects adjusted 2025 earnings to fall between $6.30 and $6.40 per share, up from a forecast increase announced in May. That updated range significantly surpasses analysts’ average estimate of $6.12 per share, according to FactSet.
Headquartered in Woonsocket, Rhode Island, CVS Health operates one of the largest drugstore chains in the U.S., alongside a massive pharmacy benefit management (PBM) business. It also insures close to 27 million people through its Aetna health insurance segment.
All three major business areas posted revenue growth of at least 10% compared to the prior year. However, adjusted operating income dropped by more than 17% in the PBM segment, largely due to lower prices negotiated with pharmacy clients.
On the insurance side, operating income surged over 39%, helped by favorable adjustments in individual insurance risk estimates and better performance in government-backed programs such as Medicare and Medicaid.
The company did note increased medical utilization, a trend that has also impacted other insurers this quarter, as more people sought care than initially anticipated.
Prescriptions filled at CVS drugstores increased by 4% during the quarter.
Overall, CVS Health reported adjusted earnings of $1.81 per share and $98.9 billion in revenue, topping analyst expectations of $1.46 per share on $94.51 billion in revenue.
Despite strong results, net income fell 42% to $1.02 billion due to $833 million in litigation-related charges.
Following several downward revisions to its forecast last year, CVS replaced former CEO Karen Lynch in the fall with David Joyner, who brought in a fresh leadership team.
Shares of CVS jumped nearly 5% on Thursday to $65.32, while broader stock indexes moved slightly higher. As of Wednesday’s close, the stock had already risen 39% this year—well ahead of the S&P 500’s 8% gain over the same period.
Also Read:
U.S. Stocks Head Toward Strong Finish After Record-Breaking Week
