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Here's What Drove the CVS Revenue and Earnings Beat

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CVS (CVS) beat revenue and earnings expectations and raised guidance, a pretty good combination for the the stock of a large old healthcare and staples company to move higher. 

The stock rose 2.93% to $69.29 a share Wednesday. 

Before we get to the drivers of the strong quarter, let's review the headline numbers first. 

Earnings per share came in at an adjusted $1.84, beating Wall Street's estimates of $1.77. Revenue was $64,8 billion, against analysts expectations of $63.01 billion. Management also raised guidance full year 2019 adjusted EPS guidance from a prior range of $6.89 to $7 to a new range of $6.97 to $7.05. 

On the top line, the integration of Aetna looks to be smooth and mostly complete. Aetna contributed roughly $16.5 billion of revenue to a healthcare benefits business that saw a total of $17.18 billion in revenue. Last year's third quarter saw revenue for the segment come in at $641 million. "Revenue growth was primarily driven by the impact of the acquisition of Aetna," the company said on the earnings release. This is key for the stock, as analysts had said earlier in 2019 that they wanted to see a smooth and full integration of Aetna, which had a couple speed bumps, before becoming more bullish on the stock. 

Elsewhere, higher drug prices boosted revenue across the rest of the business.

For the pharmacy services segment, "total revenues increased 6.4% for the three months ended September 30, 2019 compared to the prior year primarily due to brand name drug price inflation," the company said. Revenue there was $36 billion.

The retail and long-term care segment saw revenue of $21.46 billion, driven by higher drug prices. Higher prescription volume also helped. 

The stock is now up 29% from its 2019 low of $52.13, which it hit on April 2. 

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