Summary
CVS Health Corporation reported strong revenue growth in 2022, with total revenues increasing by 10.4% year-over-year to $322.5 billion. This growth was primarily driven by increased membership in the Health Care Benefits segment, higher prescription volumes and specialty pharmacy growth in the Pharmacy Services segment, and robust prescription and front store sales in the Retail/LTC segment. However, operating income saw a significant decrease of 41.3% to $7.7 billion, largely impacted by $5.8 billion in opioid litigation charges and a $2.5 billion loss on assets held for sale related to the long-term care business. The company also experienced a notable decline in its Medicare Advantage star ratings, with only 21% of members in plans rated 4 stars or higher for 2023, down from 87% in 2022, impacting future bonus payment eligibility. Despite the decrease in operating income due to specific charges, CVS Health demonstrated resilience across its core businesses. The company's outlook for 2023 anticipates continued Medicare and Commercial membership growth, improved purchasing economics in Pharmacy Services, and increased prescription volume in Retail/LTC, although offset by pharmacy reimbursement pressures and a decline in COVID-19 related revenues. The company is also pursuing strategic acquisitions, notably Oak Street Health and Signify Health, which are expected to close in 2023, signaling a focus on expanding its care delivery capabilities.
Financial Highlights
57 data points| Revenue | $322.47B |
| Cost of Revenue | $196.89B |
| Gross Profit | $125.58B |
| Operating Expenses | $314.51B |
| Operating Income | $7.95B |
| Interest Expense | $2.29B |
| Net Income | $4.31B |
| EPS (Basic) | $3.29 |
| EPS (Diluted) | $3.26 |
| Shares Outstanding (Basic) | 1.31B |
| Shares Outstanding (Diluted) | 1.32B |
Key Highlights
- 1Total revenues grew 10.4% to $322.5 billion in 2022.
- 2Operating income declined 41.3% to $7.7 billion due to significant opioid litigation charges ($5.8 billion) and a loss on assets held for sale ($2.5 billion).
- 3Medicare Advantage star ratings saw a significant decrease, with only 21% of members in 4-star or higher plans for 2023, impacting future quality bonus payments.
- 4Health Care Benefits segment revenues increased 11.2%, driven by membership growth across Commercial and Medicare, though Medicaid membership declined.
- 5Pharmacy Services segment revenues increased 10.6%, supported by higher claims volume and specialty growth, though impacted by client price improvements.
- 6Retail/LTC segment revenues rose 6.5%, with strong same-store sales in Pharmacy and Front Store, but adjusted operating income decreased due to lower COVID-19 related services and pharmacy reimbursement pressures.
- 7The company is proceeding with strategic acquisitions of Oak Street Health and Signify Health, expected to close in 2023.