COVID-19 vaccines and tests for the virus continue to boost CVS Health Corp. and the health care giant raised its annual forecast after yet another strong quarter.
The drugstore chain and pharmacy benefit manager also processed more prescriptions and added customers to its health insurance business in a better-than-expected performance.
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“Our strategy improves access to affordable, convenient and personalized health care, which benefits consumers and shareholders. We once again showed the power of our purpose and potential, building on our strong momentum and raising full-year guidance as a result,” said Karen S. Lynch, CVS Health Corp. president and CEO.
The company said Wednesday that it administered more than 8 million COVID-19 vaccines in the first quarter, a big drop from the 20 million it administered in the last quarter of 2021, when customers sought boosters and many children began getting the shots.
CVS Health also administered six million tests in the first quarter and its drugstores got a boost from customers buying additional tests as the omicron surge of the virus peaked at the start of the quarter.
The vaccines and tests are bringing more customers into CVS Health drugstores, but that advantage may be starting to wane, said Neil Saunders, who follows the company as managing director of GlobalData.
“It is reasonable to question how long it will continue to deliver,” Saunders said in an email.
CVS Health Corp. operates one of the nation’s largest drugstore chains with nearly 10,000 retail locations. It also runs prescription drug plans for big clients like insurers and employers through a large pharmacy benefit management business.
It also provides health insurance for more than 24 million people through its Aetna arm.
That health insurance business has added 674,000 customers since the end of last year. But the segment saw its adjusted operating income drop slightly in the first quarter, partly because medical costs are returning to normal levels.
Claims processed in the company’s biggest business, its pharmacy benefits management segment, also climbed nearly 6% compared to last year’s quarter, which had a weaker cough, cold and flu season.
Quarterly net income climbed 89% to $2.31 billion and increase from $2.2 billion a year ago. Operating income slipped to $349 million from $357 million year over year due to settlement the company reached with the state of Florida to settle opioid-related litigation.
Adjusted operating income grew to a $484 million from $420 million year over year.
Overall, the company posted adjusted earnings of $2.22 per share, beating analyst projections for $2.17, and an 18 cent per share increase year over year.
Revenue was $76.8 billion, topping Wall Street’s expectations for $75.54 billion, and an increase from $69 billion year over year.
CVS Health said it now expects per-share earnings of between $8.20 and $8.40 this year.
The new outlook mostly eclipses Wall Street projections of $8.26 per share, according to FactSet.
Company shares slipped in February after the company reported fourth quarter results that easily topped expectations but didn’t hike its forecast for the year, citing the pandemic’s unpredictable nature.
Shares of CVS Health Corp., based in Woonsocket, rose almost 2% before the opening bell.
Providence Business News contributed to this report.
