WOONSOCKET – CVS Health Corp. posted net income of $1.3 billion in the third quarter, a year-over-year decline of 16.6 percent. Revenue for the three months ended Sept. 30 increased 3.5 percent to $46.2 billion. Earnings per diluted share totaled $1.26, a decline from $1.43 a year earlier.
“The solid third-quarter results … keep us well on track to achieve our full-year targets,” said company CEO and President Larry J. Merlo. “While operating profit in the Retail/LTC Segment was impacted by the devastating hurricanes, operating profit in the Pharmacy Services Segment was in line with expectations.”
Same-store sales for the Retail/LTC Segment fell 3.2 percent year over year, driven by multiple factors specific to the two components of the retail operations. Pharmacy same-store sales fell 3.4 percent for the quarter compared with the same 2016 period, affected negatively by increased use of generic drugs as well as the use of restricted networks that exclude CVS Pharmacy.
Same-store sales in the front of the store fell 2.8 percent for the quarter, due to “softer customer traffic,” among other things.
The company opened 56 new retail locations in the quarter, closed five and relocated five. As of Sept. 30, CVS operated 9,751 retail locations, including pharmacies inside Target stores. Its retail operations were located in 49 states, the District of Columbia, Puerto Rico and Brazil. The company expects to close 70 retail stores in 2017, which will result in cumulative charges of about $220 million.
Despite the slight headwinds, Merlo showed optimism for the remainder of the year. “Given our performance year to date and our confidence in our expectations … we are narrowing and raising the midpoint of our Adjusted EPS guidance for 2017,” he said. The company expects diluted earnings per share to range from $4.98 to $5.02, from its previous guidance of $4.92 to $5.02. Adjusted EPS, which will include charges due to the multiple hurricanes this fall, has changed to $5.87 to $5.91 from $5.83 to $5.93.
Shares of CVS Health had fallen $2.01 to $67.24 as of 10:59 a.m. in trading on the New York Stock Exchange.
