CVS Health (CVS) Q1 2025 gains

CVS health On Thursday, he reported profits and income from the first quarter that overcame the estimates and uploaded their guide, since their problematic insurance problem showed some improvement during the period.

CVS shares closed 4% higher on Thursday.

The company now expects profits of the full year from $ 6 to $ 6.20 per share, above an earlier guide of $ 5.75 to $ 6 per share.

But the company reviewed that its GAAP diluted EPS guide is lower, which includes positions related to a legal battle that involves its subsidiary of pharmacy service providers, Omnicare. This week, a jury found Omnicare responsible for dispensing drugs without valid recipes to elderly and disabled people in assisted life and long -term care facilities. CVS plans to appeal.

The company did not provide an income forecast for the year. CVS said it is “maintaining a cautious vision for the rest of the year” in the light of the highest continuous medical costs and “the potential of winds against macro.”

“We got smarter about the markets we wanted and the lives we wanted to compete for, so we have really planned and budgeted for high trends,” said the CVS CEO, David Joyner, in an interview with CNBC, referring to the markets in which the insurance unit and the highest medical costs operate

“So I think why you are not seeing a surprise on our part is because we really plan high trends this year,” he added.

Joyner said the company is observing the potential impact of President Donald Trump's planned rates on the imported pharmaceutical products to the United States.

“On the pharmacy side, I think it depends largely on what happens in next week or two when they announce the implications of the tariffs for manufacturers,” he told CNBC. Joyner added that the vast majority of the company's retail products in the front of the stores are obtained in the US., “What should be a benefit to us.”

This is what CVS reported for the first quarter compared to what Wall Street expected, based on a LSEG analysts survey:

• Profit per action: $ 2.25 per adjusted action compared to $ 1.70 per expected action
• Revenue: $ 94.59 billion compared to $ 93.64 billion expected

The company's insurer, Aetna, and her rivals have been persecuted for higher medical costs than expected during the last year as more patients with Medicare advantage return to hospitals for the procedures that delayed during the pandemic. But for the first time in several quarters, CVS's insurance business seemed to show some signs of improvement.

The unit medical benefits index, a measure of total medical expenses paid in relation to the premiums collected, decreased to 87.3% of 90.4% a previous year. A lower relationship generally indicates that a company collected more on premiums than it paid for benefits, resulting in greater profitability.

CVS said the movement reflects in part a stronger underlying performance in its Medicare business and improved the Medicare Advantage Star Star qualifications for the year of Payment 2025. These qualifications help patients compare the quality of Medicare health plans and medicines.

“I think that the investment and talent that allowed us to focus both on execution and operation … They actually helped establish the performance he is seeing,” said Joyner, referring to an executive reorganization last year that took advantage of a new leader for the insurance unit and other parts of the business.

The results limit the second complete quarter with Joyner, a CVS executive for a long time, as executive director of the pharmacy retail chain. Joyner happened to Karen Lynch in mid -October, since CVS fought to generate greater profits and improve their stock performance.

The company underwent managerial reorganization as part of a broader response plan that includes $ 2 billion in cost cuts in the coming years.

Even so, the CVS yield was partially compensated for a charge of $ 431 million of the so -called premium deficiency reserves in the Insurance Unit, which is related to early losses in the year of coverage 2025. That refers to a responsibility that an insurer may need to cover if future premiums are not sufficient to pay claims and anticipated expenses.

The company registered net income of $ 1.78 billion, or $ 1.41 per share, for the first quarter. That is compared to the net income of $ 1.12 billion, or 88 cents per share, for the period of year and more.

Excluding certain elements, such as intangible assets, restructuring charges and capital losses, adjusted profits were $ 2.25 per action for the quarter.

CVS reserved sales of $ 94.59 billion for the first quarter, 7% more than the same period of a year due to growth in its three commercial segments.

But sales in the company's retail pharmacy segment lost the expectations of Wall Street for the quarter, according to Streetacount. This business has been pressed for the softest consumer spending and the lowest reimbursements for prescription medications.

The CVS insurance business reserved $ 34.81 billion in revenues during the quarter, 8% more than the first quarter of 2024. Analysts expected the unit to collect $ 33.51 billion for the period, according to Streetacount estimates.

The unit also registered an adjusted operational income of $ 1.99 billion for the first quarter, compared to $ 732 million for the winning year period.

Also on Thursday, CVS said that Aetna will stop offering health insurance plans in the markets of the Health Care Law at a low price, also known as individual exchanges, from the year of Plan 2026.

The CVS consumer pharmacy and well -being division reserved $ 31.91 billion in sales for the first quarter, more than 11% since the same period of the previous year.

But that was far from the $ 35.27 billion that analysts expected for the quarter, according to Streetacount.

This unit dispenses the prescriptions in the more than 9,000 retail pharmacies of CVS and provides other pharmacy services, such as vaccines and diagnostic tests.

The CVS health services segment generated $ 43.46 billion in revenues for the quarter, an increase of almost 8% compared to the same quarter in 2024. Analysts expected the unit to publish $ 43.64 billion in sales for the period, according to Streetacount.

That unit includes CaMark, one of the largest pharmacy benefits managers in the country. Caremark negotiates discounts on medications with manufacturers in the name of insurance plans and create lists of medicines or forms, which are covered by safe and reimburse pharmacies for recipes.