During the pre-market session on Wednesday, CVS Health Corp (NYSE:CVS) fell after the company reported mixed second-quarter results and reduce annual profit forecastsThe stock has been volatile since then.
The company reported second-quarter revenue of $91.23 billion, missing the $91.51 billion consensus.
Total revenue increased 2.6%, primarily driven by growth in the Healthcare Benefits and Pharmacy & Consumer Wellness segments, partially offset by a decline in the Healthcare Services segment.
Adjusted EPS of $1.83 decreased from $2.21 in the prior year, beating consensus of $1.73. The decline was primarily due to lower operating results in the Health Care Benefits segment, reflecting continued utilization pressure and the unfavorable impact of the company’s Medicare Advantage star ratings for payment year 2024 within the Medicare product line.
Adjusted operating income decreased 16.4% to $3.74 billion.
Read also : CVS, Rite Aid and Walgreens hit hard by online pharmacy trend.
Revenues from the health benefits segment increased 21.4% to $32.48 billion. The medical benefits ratio increased to 89.6% from 86.2% a year earlier. The number of health insurance plan members reached 27 million.
Health Services segment revenue decreased 8.8% to $42.17 billion. Pharmacy claims processed decreased 18.3%.
Based on the current performance and outlook of the healthcare delivery segment, the company has decided to make management changes with immediate effect.
Brian Kane is leaving the company and CEO Karen Lynch will assume direct leadership of the healthcare benefits segment.
Karen and Tom Cowhey, CVS Health’s chief financial officer, will oversee the day-to-day management of the business.
Advice: CVS Health revised its adjusted EPS forecast to $6.40-$6.65 from at least $7.00 against a consensus of $6.98.
CVS Health also revised its full-year 2024 operating cash flow forecast to about $9.0 billion, from at least $10.5 billion.
The revised guidance reflects continued pressure on the healthcare delivery segment.
CVS Health forecasts 2024 revenue of $369.0 billion, or $372.0 billion versus consensus of $368.876 billion and prior guidance of at least $369 billion.
The company expects adjusted operating income of $13.75 billion to $14.15 billion, compared with Before forecasts of at least $14.75 billion.
The company expects a medical benefits ratio of 90.6% to 90.8% versus approximately 89.8% previously expected.
Price action: CVS shares were up 1.22% at $59.05 in premarket trading at last check on Wednesday.
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This item CVS Health reports mixed second-quarter results, cuts 2024 outlook, shuffles segment leadership initially…
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