The CVS Health logo is shown in this photo taken on May 3, 2022. REUTERS/Dado Ruvic/Illustration
Aug 3 (Reuters) – CVS Health Corp ( CVS.N ) on Wednesday raised its annual profit forecast after strength in its insurance business and sales of COVID-19 prescription drugs helped boost quarterly revenue.
Shares in the largest U.S. pharmacy chain rose about 3 percent before the bell.
The company’s retail and long-term care segment revenue rose 6.3% to $26.3 billion, with sales of OTC antigen covid testing kits and the impact of the flu season offsetting lower covid-19 vaccinations and test results.
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Pharmacy chain operators such as CVS have benefited from distributing Covid vaccines and tests during the pandemic, with Omicron-led infections increasing demand for OTC tests during the quarter.
Laboratory testing and vaccine demand, however, remain stable in the United States overall, with more than two-thirds of people fully vaccinated and 48 percent receiving a booster dose, according to government data.
Revenue at the company’s health insurance division rose 11 percent to $22.8 billion, while the medical benefit ratio, or expense as a percentage of premiums, fell to 82.9 percent from 84.1 percent. The expected speed, allows the company to control costs.
CVS raised its adjusted earnings outlook to $8.40-$8.60 per share from an earlier forecast of $8.20-$8.40 per share.
Net income for the quarter ended June 30 was $2.96 billion, or $2.23 per share, from $2.79 billion, or $2.10 per share, a year earlier.
Total revenue rose to $80.6 billion from $72.6 billion a year ago.
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by Lero Leo and Bhanvi Satija in Bengaluru; Editing by Vinay Dwivedi
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