CVS Beats Wall Street Expectations, Stock Soars
In its fourth quarter and full-year 2024 earnings report, CVS Health (CVS) exceeded analyst estimates, boosting its stock by nearly 8% in pre-market trading.
Financial Highlights
* Full-year revenue: $372.8 billion
* Fourth-quarter revenue: $97.7 billion (vs. $96.8 billion expected)
Performance by Segment
* Health care benefits segment: Slight decline due to Medicare and Medicaid headwinds
* Retail pharmaceutical business: Growth
* Health care services segment: Increase
Medical Loss Ratio (MLR)
* 92.5% for the fourth quarter, a slight improvement from 95.2% in Q3
* Insurers are required to spend 80%-85% of premium dollars under the Affordable Care Act
Other Key Points
* CVS remains exposed to potential regulatory changes affecting pharmacy benefits managers
* New CEO David Joyner took over towards the end of 2024
* Profits declined by 38% year-over-year to $8.5 billion
* Shares fell 40% in 2024
* 2025 guidance: Adjusted earnings per share of $5.75-$6 (no annual revenue guidance provided)
Analyst Commentary
"While industry challenges have impacted our Health Care Benefits segment, we continue to see growth in key areas such as Pharmacy and Consumer Wellness," said CEO Joyner.