Summary
CVS Health Corporation (CVS) reported strong top-line growth for the nine months ended September 30, 2012, with net revenues increasing by 16.4% to $91.7 billion compared to the same period in 2011. This growth was driven by solid performance in both the Pharmacy Services and Retail Pharmacy segments, benefiting from new client wins, drug cost inflation, and increased prescription volumes. The company's profitability also saw a significant increase, with net income attributable to CVS Caremark rising by 14.6% to $2.75 billion. Operationally, CVS Health continued its aggressive share repurchase program, demonstrating a commitment to returning capital to shareholders. The company also maintained a strong cash flow from operations, indicating financial health and the ability to fund ongoing operations and strategic initiatives. Despite the positive financial results, the company faces ongoing legal matters and potential regulatory challenges inherent in the healthcare and PBM industries, which are disclosed but management believes will not have a material adverse effect.
Financial Highlights
55 data points| Revenue | $30.24B |
| Cost of Revenue | $24.58B |
| Gross Profit | $5.64B |
| Operating Expenses | $3.83B |
| Operating Income | $1.81B |
| Interest Expense | $135.00M |
| Net Income | $1.00B |
| EPS (Basic) | $0.79 |
| EPS (Diluted) | $0.79 |
| Shares Outstanding (Basic) | 1.26B |
| Shares Outstanding (Diluted) | 1.27B |
Key Highlights
- 1Net revenues grew 16.4% year-over-year to $91.7 billion for the nine months ended September 30, 2012.
- 2Net income attributable to CVS Caremark increased by 14.6% to $2.75 billion for the nine months ended September 30, 2012.
- 3Operating profit increased by 12.5% to $4.925 billion for the nine months ended September 30, 2012.
- 4The company repurchased $4.0 billion of its common stock during the first nine months of 2012 under its share repurchase programs.
- 5Net cash provided by operating activities was $4.94 billion for the nine months ended September 30, 2012.
- 6The Pharmacy Services segment experienced a significant increase in net revenues (27.4%) driven by new client starts and Medicare Part D program growth.
- 7The Retail Pharmacy segment saw net revenue growth of 7.4%, benefiting from same-store sales increases and the impact of the Express Scripts/Walgreens network dispute.