It's always better to be more transparent than less.
That's the tack CVS Health (CVS) - Get Report took on Tuesday, announcing that it is trimming its full-year per-share earnings guidance amid an earlier-than-expected write-off of debt.
Citing “an estimated loss on early extinguishment of debt during the third quarter," CVS cut its full-year earnings outlook to between $5.16 and $5.29 a share from its earlier forecast of between $5.59 and $5.72 a share.
However, the Woonsocket, R.I. company left its adjusted per-share guidance at between $7.14 and $7.27 a share, in line with analysts polled by FactSet. It also still expects full-year 2020 cash flow from operations of between $11 billion and $11.5 billion.
CVS last month posted stronger-than-expected second quarter earnings and boosted its full-year profit guidance as Aetna sales continued to boost its bottom line.
Retail sales rose 1% to $21.662 billion, as same-store sales accelerated 4.6%, while the healthcare benefits division saw sales rise 6.2% to $18.468 billion as it added Aetna's operations to its legacy business.
However, it also projected higher utilization in its health care benefits segment in the second half of 2020 as well as “continued significant Covid-19-related investments, including operating costs, in the remainder of the year.”
Separately, CVS last week opened some 2,000 CVS Pharmacy drive-thru locations to children aged 12 years and older as part of its effort to increase access to Covid-19 testing. The company also opened an additional 120 test sites this past Friday.
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