Summary
CVS Health Corporation reported solid financial results for the nine months ended September 30, 2019, with total revenues increasing by 35.5% to $189.9 billion, largely driven by the transformative Aetna acquisition completed in late 2018. Net income attributable to CVS Health significantly improved, reaching $4.9 billion for the nine-month period, a substantial turnaround from a net loss in the prior year, primarily due to the absence of a large goodwill impairment charge and the positive contribution of Aetna. The company's operating segments showed varied performance. Pharmacy Services demonstrated steady growth in both revenue and adjusted operating income, driven by increased claims volume and improved purchasing economics. The Retail/LTC segment experienced revenue growth but faced margin pressures, while the Health Care Benefits segment, significantly expanded by the Aetna acquisition, showed dramatic revenue and operating income increases, underscoring the strategic importance of this integration. The company also highlighted its ongoing efforts to manage costs and pursue synergies from the Aetna acquisition, projecting approximately $800 million in synergies by 2020.
Financial Highlights
55 data points| Revenue | $64.81B |
| Cost of Revenue | $40.44B |
| Gross Profit | $24.37B |
| Operating Expenses | $61.88B |
| Operating Income | $2.93B |
| Interest Expense | $747.00M |
| Net Income | $1.53B |
| EPS (Basic) | $1.17 |
| EPS (Diluted) | $1.17 |
| Shares Outstanding (Basic) | 1.30B |
| Shares Outstanding (Diluted) | 1.30B |
Key Highlights
- 1Total revenues for the nine months ended September 30, 2019, increased by 35.5% to $189.9 billion, primarily due to the Aetna acquisition.
- 2Net income attributable to CVS Health for the nine months was $4.9 billion, a significant improvement from a net loss of $175 million in the prior year.
- 3Operating income for the nine months surged by 179.9% to $9.0 billion, bolstered by the absence of a $3.9 billion goodwill impairment charge from the prior year and the Aetna acquisition.
- 4The Health Care Benefits segment, significantly impacted by the Aetna acquisition, saw total revenues jump 1,826.3% for the nine months and operating income increase 5,182.8%.
- 5Pharmacy Services segment revenue grew 4.6% for the nine months, driven by increased claims volume and brand name drug price inflation.
- 6The company reported $1.17 in diluted earnings per share for the third quarter of 2019, compared to $1.36 in the prior year.
- 7CVS Health announced it is on track to achieve its target of approximately $800 million in synergies from the Aetna acquisition by 2020.