CVS Health Corp. (CVS) - Get Report posted stronger-than-expected fourth quarter earnings Tuesday thanks in part to solid pharmacy retail sales, adding it will resume offering insurance plans that offer 'Obamacare' subsidies.
CVS said adjusted earnings for the three months ending in December were pegged at $1.30 per share, down 25% from the same period last year but 6 cents ahead of the Street consensus forecast. Group revenues, the company said, rose 4% from last year to $69.55 billion, again topping analysts' estimates of a $68.75 billion tally.
Looking into the 2021 financial year, CVS said it sees adjusted earnings in the region of $7.39 to $7.55 per share, compared to a Refinitv estimate of $7.54 per share.
"The COVID-19 pandemic presented unique challenges to our business and to the entire health care industry. We utilized the full depth and breadth of our capabilities and our presence in local communities across the country, to play a leadership role in COVID-19 testing and vaccine administration," said new CEO Karen Lynch. "Our ability to deliver 2020 full-year results above expectations is a testament to the strength of our strategy and the flexibility of our diversified health services model."
"Our goal is to make health care more accessible, more affordable and simpler. In order to do this, we will accelerate the pace of our progress through targeted investments in key areas that will drive our consumer-focused strategy," she added. "We believe that solving consumer health needs will deliver better health outcomes and lower costs while creating future economic benefit for CVS Health and its shareholders. "
CVS shares were marked 1.65% lower in early trading following the earnings release to change hands at $72.71 each.
Pharmacy Services revenues slipped 1.9% to $33.355 billion, CVS said, as "primarily driven by continued price compression and changes in net new business mix, partially offset by growth in specialty pharmacy and brand inflation."
Retail sales rose 6.6% to $24.062 billion, as same-store sales accelerated 5.7%. The group's healthcare benefits division saw sales rise 11.4% to $19.1 billion as it added Aetna's operations to its legacy business.
Lynch told investors Tuesday that the Affordable Care Act has 'evolved', adding there is "there is evidence of market stabilization and remedies to earlier issues."
"It is now time for us to participate in these markets," she said.