Summary
CVS Health Corporation (CVS) reported a strong second quarter and first half of 2009, demonstrating significant revenue growth driven by the strategic acquisition of Longs Drug Stores and RxAmerica. Net revenues for the second quarter increased by 17.5% year-over-year to $24.9 billion, and for the first half, they grew by 13.7% to $48.3 billion. This top-line expansion translated into improved profitability, with net earnings available to common shareholders rising by 14.4% in the quarter to $886.5 million and by 6.7% in the first half to $1.62 billion. The company's performance was bolstered by solid contributions from both its Pharmacy Services and Retail Pharmacy segments. The Pharmacy Services segment saw increased net revenues due to the integration of RxAmerica and growth in mail service claims, while the Retail Pharmacy segment benefited from the Longs acquisition and strong same-store sales growth, particularly in pharmacy. Despite increased interest expenses due to higher average debt balances, the company managed its effective tax rate well, maintaining profitability. CVS Health demonstrated a healthy cash flow from operations, which, combined with strategic debt financing and sale-leaseback transactions, provided ample liquidity. The company also continued its commitment to shareholder returns by increasing its quarterly dividend and resuming its share repurchase program. Overall, CVS Health presented a picture of robust operational performance, strategic execution through acquisitions, and prudent financial management.
Financial Highlights
53 data points| Revenue | $24.87B |
| Cost of Revenue | $19.82B |
| Gross Profit | $5.05B |
| Operating Expenses | $3.45B |
| Operating Income | $1.60B |
| Interest Expense | $129.00M |
| Net Income | $887.00M |
| EPS (Basic) | $0.61 |
| EPS (Diluted) | $0.60 |
| Shares Outstanding (Basic) | 1.46B |
| Shares Outstanding (Diluted) | 1.47B |
Key Highlights
- 1Net revenues increased by 17.5% to $24.9 billion in Q2 2009 and by 13.7% to $48.3 billion in H1 2009, largely due to the Longs and RxAmerica acquisitions.
- 2Net earnings available to common shareholders grew by 14.4% to $886.5 million in Q2 2009 and by 6.7% to $1.62 billion in H1 2009.
- 3Pharmacy Services segment revenues grew to $13.0 billion in Q2 and $24.5 billion in H1, driven by RxAmerica integration and increased mail service claims.
- 4Retail Pharmacy segment revenues rose to $13.8 billion in Q2 and $27.3 billion in H1, boosted by the Longs acquisition and robust same-store sales growth.
- 5Gross profit increased significantly, reflecting the revenue growth and benefits from higher generic drug utilization.
- 6Net cash provided by operating activities was $1.32 billion for H1 2009.
- 7The company increased its quarterly common stock dividend and resumed its share repurchase program.