CVS Beats Expectations, Stock Soars
CVS (CVS) reported strong fourth quarter and full year 2024 earnings, surpassing Wall Street estimates and driving a significant pre-market stock surge.
Revenue and Earnings
Full year revenue reached $372.8 billion, while fourth quarter revenue was $97.7 billion, exceeding expectations of $96.8 billion. However, the health care benefits segment, impacted by Medicare and Medicaid challenges, experienced a slight decline.
Insurance Performance
CVS reported a medical loss ratio (MLR) of 92.5%, indicating a slight improvement from the record high of 95.2% in the third quarter. The Affordable Care Act mandates insurers spend 80%-85% of premium dollars, with the lower end being more favorable for investors.
Company Outlook
Despite government insurance headwinds, CVS's retail pharmaceutical business and health care services segment showed growth. For 2025, the company guided adjusted earnings per share between $5.75 and $6. They withheld annual revenue guidance.
CEO Statement
"We have continued to see growth in key areas of our business, while addressing industry-wide challenges that have impacted our Health Care Benefits segment," said CEO David Joyner.
Industry Coverage
Anjalee Khemlani, senior health reporter at Yahoo Finance, covers the latest news and analysis on pharma, insurance, care services, PBM, and health policy.