CVS Beats Q1 Earnings Forecast As COVID-19 Lockdowns Boost Pharmacy and Retail Sales

CVS confirmed its full-year profit forecast of adjusted per share earnings in the $7.04 to $7.17 range after a Street beating first quarter.
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CVS Health Corp.  (CVS) - Get Report posted stronger-than-expected first quarter earnings Wednesday as coronavirus lockdowns boosted retail and pharmacy sales as customers stockpiled household items and medical prescriptions.  

CVS said adjusted earnings from continuing operations for the three months ending in March were pegged at $1.91 per share, up 17.9% from the same period last year and 28 cents ahead of the Street consensus forecast. Group revenues, CVS said, rose 8.3% to $66.8 billion, thanks in part to the addition of Aetna sales to the group's top line and again topping analysts' estimate of a $64.1 billion tally.

Front same store sales rose 8%, from last year CVS said, while comparable pharmacy store sales surged by 9.3%. 

The group also confirmed its full-year profit forecast, projecting adjusted earnings in the region of $7.04 to $7.17 per share, and cash flow from operations in the range of $10.5 billion to $11 billion.

"When facing any health crisis, including this pandemic, we're uniquely positioned to understand consumer and patient needs and how to address them. This includes increasing access to medicine and virtual care, and testing thousands for the virus every day to ready our country to reopen safely', said CEO Larry Merlo. "We're utilizing our innovation-driven health care model, scale and unique capabilities to benefit consumers across the health care system, and none of this could be done without the tireless dedication of our colleagues."  

CVS shares were marked 1.8% higher in early trading following the earnings release to change hands at $62.31 each, a move that would trim the stock's year-to-date decline to around 15%.

Pharmacy Services revenues rose 4.2% to $34.98 billion, CVS said, "primarily due to growth in specialty pharmacy, brand inflation and increased total pharmacy claims volume, including greater use of 90-day prescriptions and early refills of maintenance medications as consumers prepared for the COVID-19 pandemic."  

Retail sales rose 7.7% to $22.75 billion while the group's healthcare benefits division saw sales surge to $19.2 billion as it added Aetna's operations to its legacy business.