Summary
CVS Health Corporation (CVS) reported its third-quarter and year-to-date results for the period ending September 30, 2013. The company demonstrated strong top-line growth, with net revenues increasing by 5.8% to $31.97 billion for the quarter and 2.4% to $93.98 billion for the nine-month period. This growth was driven by both the Pharmacy Services and Retail Pharmacy segments, supported by volume increases, drug cost inflation in specialty pharmacy, and same-store sales growth in retail. Profitability also saw a significant improvement, with operating profit rising 19.1% to $2.16 billion in the quarter and 18.2% to $5.83 billion year-to-date. This was bolstered by increased gross profit margins, particularly from higher generic drug sales across both segments, and a gain from a legal settlement. Diluted earnings per share increased to $1.02 for the quarter, up from $0.79 in the prior year. The company also continued its commitment to returning capital to shareholders through share repurchases and dividends, repurchasing $1.5 billion in the quarter and maintaining a substantial remaining authorization for future buybacks.
Financial Highlights
56 data points| Revenue | $31.93B |
| Cost of Revenue | $25.91B |
| Gross Profit | $6.03B |
| Operating Expenses | $3.87B |
| Operating Income | $2.15B |
| Interest Expense | $125.00M |
| Net Income | $1.25B |
| EPS (Basic) | $1.03 |
| EPS (Diluted) | $1.02 |
| Shares Outstanding (Basic) | 1.22B |
| Shares Outstanding (Diluted) | 1.23B |
Key Highlights
- 1Net revenues increased by 5.8% to $31.97 billion for the three months ended September 30, 2013, compared to the prior year period.
- 2Operating profit for the quarter rose by 19.1% to $2.16 billion, reflecting improved gross margins and operational efficiencies.
- 3Diluted earnings per share (EPS) increased to $1.02 for the three months ended September 30, 2013, compared to $0.79 in the same period last year.
- 4The Pharmacy Services segment saw a 7.8% increase in net revenues for the quarter, driven by volume growth and specialty pharmacy drug cost inflation.
- 5The Retail Pharmacy segment reported a 5.0% increase in net revenues for the quarter, supported by same-store sales growth and new store openings.
- 6CVS Health repurchased $1.5 billion of its common stock during the quarter, as part of its ongoing $6.0 billion share repurchase program.
- 7The company's gross profit margin improved due to increased generic drug dispensing rates across both major operating segments.