10-QPeriod: Q3 FY2013

CVS HEALTH Corp Quarterly Report for Q3 Ended Sep 30, 2013

Filed November 5, 2013For Securities:CVS

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
Beta

Revenue

$31.93B

18.9% Gross Margin

Net Income

$1.25B

3.9% Net Margin

EPS (Diluted)

$1.02

Total Assets

$67.81B

Cash & Equivalents

$1.50B

Free Cash Flow

$1.18B

Financial Statements
Beta
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.

Frequently Asked Questions

CVS Health reported a strong third quarter in 2013, with net revenues increasing by 5.8% to $31.97 billion and operating profit growing by 19.1% to $2.16 billion. Diluted earnings per share rose to $1.02, reflecting improved profitability across its business segments.

Both the Pharmacy Services and Retail Pharmacy segments contributed to revenue growth. The Pharmacy Services segment saw a 7.8% increase driven by higher volumes and specialty drug costs, while the Retail Pharmacy segment grew by 5.0% due to same-store sales and new store additions.

CVS Health actively managed its capital by repurchasing $1.5 billion of its common stock during the quarter under its $6.0 billion repurchase program. The company also paid dividends, indicating a continued focus on returning value to shareholders.

The filing details several legal proceedings and contingencies, including antitrust litigation, securities fraud allegations, and government investigations related to prescription drug claims and business practices. While the company accrues for probable losses, the ultimate outcomes and potential impact remain subject to significant uncertainties.