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CVS Tops Earnings Forecast, Boosts 2021 Guidance on Pharmacy Sales Gains

Solid revenue gains in pharmacy and retail help CVS to a stronger-than-expected first-quarter profit of $2.04 a share.

CVS Health  (CVS) - Get CVS Health Corporation Report posted stronger-than-expected first quarter earnings Tuesday, and boosted its full-year profit guidance, as retail and pharmacy services sales got a lift from customers seeking coronavirus vaccinations and tests. 

CVS said adjusted earnings for the three months ending in March were pegged at $2.04 per share, up 6.8% from the same period last year and well ahead of the Street consensus forecast of $1.72 per share. Group revenues, CVS said, rose 3.5% from last year to $69.1 billion, again topping analysts' estimates of a $68.4 billion tally.

Looking into the 2021 financial year, CVS lifted its forecast for adjusted earnings, which it now sees in the region of $7.56 to $7.68 per share, from its prior forecast of 7.39 to $7.55 per share.

"We delivered strong first quarter results and improved our outlook for the year," said CEO Karen Lynch. "We continue to execute on our strategy while simultaneously managing through a pandemic, helping the country on the road to recovery."

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"Our unmatched assets and strength of our brand are driving results as we work toward improving care delivery and driving growth," she added.  

CVS shares were marked 2.5% higher in early trading following the earnings release to change hands at $79.57 each, extending its six-month gain to around 31.8%.

Pharmacy Services revenues rose 3.8% to $36.067 billion, CVS said, Retail sales rose 2.3% to $23.274 billion, "driven by increased COVID-19 diagnostic testing and vaccinations and brand inflation". The group's healthcare benefits division saw sales rise 7.5% to $18.94 billion as it added Aetna's operations to its legacy business.