NEW YORK (TheStreet) -- CVS Health Corp. (CVS) - Get Report shares are retreating 2.7% to $101 in pre-marketing trading on Friday after the Woonsocket, RI-based pharmacy retailer and services giant reported its third quarter 2015 earnings and updated its future guidance.
Earnings for the latest quarter came in at $1.28, under analysts' estimates of $1.29 a share.
Revenue of $38.64 billion however, topped forecasts of $37.89 billion.
In the third quarter of fiscal 2014, the company earned $1.15 a share on revenue of $35.02 billion.
TheStreet's Jim Cramer, Portfolio Manager of the Action Alerts PLUS Charitable Trust Portfolio, commented on CVS: "This is a confusing quarter given that even if you back out tobacco sales you you get a light number. This one is the best of the best so it is quizzical and we have to find out more."
Along with the earnings release, the company lowered its 2016 guidance to a range of $5.68 a share to $5.88 a share, below analysts' forecasts of $6.02 a share.
However, outlook for the full year narrowed to a range of $5.14 a share to $5.18 a share, compared to its previous outlook of $5.11 a share to $5.18 a share.
Sales for the latest quarter were boosted by a rise in specialty pharmacy and pharmacy network claims, the company said. This offset slowing growth in its drugstore business, which was negatively impacted by a drop in customer traffic and sales due to the action taken last year to cease all tobacco sales.
In addition, CEO Larry Merlo said, "The third quarter included the closing of the Omnicare acquisition in mid-August, and we are very optimistic about the potential that this long-term care business creates for us."
Separately CVS Health, along with Express Scripts (ESRX) and UnitedHealth Group said that it was cutting ties with pharmacy PhilidorRX Services LLC. CVS said that audits found the pharmacy wasn't complying with terms of its agreement, the Wall Street Journal reports.
Separately, TheStreet Ratings team rates CVS HEALTH CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
We rate CVS HEALTH CORP (CVS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.
You can view the full analysis from the report here: CVS