CVS Health Corp. (CVS - Get Report) posted stronger-than-expected first quarter earnings Wednesday, and boosted the mid-point of its full-year profit forecast, as the healthcare benefits manager's $69 billion purchase of Aetna begins to influence its bottom line and offset a slowdown in retail sales growth.
CVS said adjusted earnings for the three months ending in March came in at $1.62 per share, rising 9.5% from the same period last year and beating the Street consensus forecast by 11 cents. Group revenues, CVS said, surged 34.8% to $61.6 billion and comfortably topped analysts' of $60.39 billion.
CVS also raised and narrowed the range of its full-year earnings guidance, and now sees 2019 adjusted operating income in the region of $15 billion to $15.2 billion. It also confirmed its cash-flow guidance of $9.8 billion to $10.3 billion.
"We generated strong first quarter results, providing positive momentum to start the year. Following the close of our Aetna acquisition in late November, our first full quarter of combined operations was a success in many ways," said CEO Larry Merlo. "In the quarter we continued to advance our integration efforts while beginning to launch new innovations such as our HealthHUB®concept stores."
"With our differentiated collection of health care assets we are uniquely positioned to lead the transformation of the U.S. health care system," Merlo added "We remain relentlessly focused on creating value for clients and customers while driving both near and longer-term returns for our shareholders."
CVS shares rose 5.1% on Wednesday to $57.15.
Pharmacy Services revenues rose 3.1% to $33.558 billion, CVS said, "primarily due to brand name drug price inflation as well as increased total pharmacy claims volume." Retail sales rose 3.3% to $21.115 billion, even as same-store sale growth slowed to 3.8%. The group's healthcare benefits division saw sales surge from 1.318 billion to $17.87 billion as it added Aetna's operations to its legacy business.