FILE PHOTO: People walk by a CVS Pharmacy store in the Manhattan borough of New York City, New York, U.S., November 30, 2017. REUTERS/Shannon Stapleton
August 4, 2021
(Reuters) -CVS Health Corp raised its annual earnings forecast, after it reported a quarterly profit on Wednesday that beat analysts’ estimates, helped by higher prescription drug sales, COVID-19 testing and vaccinations at its pharmacies and clinics.
With nearly half of all Americans fully vaccinated, demand for prescription drugs and over-the-counter products at the company’s pharmacies recovered from the declines seen in previous quarters during the height of the pandemic.
CVS Health raised its 2021 adjusted profit per share outlook to between $7.70 and $7.80, from $7.56 to $7.68, after it reported an 11.1% increase in quarterly revenue to $72.6 billion.
The company, however, warned of COVID-19 vaccinations to slow in the second half of the year, and medical costs to increase modestly at its health insurance unit Aetna.
Health insurers saw lower medical costs during the initial phase of the pandemic, as people deferred elective medical procedures, however, widespread vaccinations have led to demand for non-COVID healthcare services normalizing.
CVS said its medical benefit ratio (MBR), or the percentage of premiums paid for medical services, for the second quarter rose to 84.1% from 70.3%. A lower MBR is better for health insurers as it signals a tight rein on medical costs.
On an adjusted basis, CVS earned $2.42 per share, beating estimates of $2.06 per share, according to Refinitiv IBES data.
(Reporting by Amruta Khandekar and Manojna Maddipatla in Bengaluru; Editing by Shounak Dasgupta)
Source: One America News Network
