What You Need To Know Ahead of CVS Earnings Wednesday
- August 7, 2024
Key Takeaways
- CVS Health reports second-quarter earnings ahead of the opening bell Wednesday, after its first-quarter results sent the company’s stock to its worst day of the year.
- CVS’s Q2 revenue is expected to rise and profit is seen falling from last year, as the pharmacy and health insurer has cited higher medical costs.
- CVS has lowered its full-year earnings per share (EPS) projections in its last two reports.
Pharmacy giant CVS Health ( CVS ) reports second-quarter earnings ahead of the opening bell Wednesday, after its first-quarter results sent the company’s stock sinking nearly 17%, its worst day of the year.
Analysts project second-quarter revenue of $91.54 billion, up from $88.92 billion a year ago, according to estimates compiled by Visible Alpha. Similar to its first-quarter result, analysts expect profit to shrink despite higher revenue, which CVS has previously attributed to elevated costs from health insurance claims .
| Analyst Estimates for Q2 2024 | Q1 2024 | Q2 2023 | |
| Revenue | $91.54 billion | $88.44 billion | $88.92 billion |
| Diluted EPS | $1.34 | 88 cents | $1.48 |
| Net Income | $1.69 billion | $1.12 billion | $1.91 billion |
Key Metric: Net Income
CVS lowered its projections for full-year earnings per share (EPS ) in its last two earnings reports , citing higher-than-expected payouts for insurance claims as Americans undergo procedures covered by insurance at a greater rate than during the pandemic. The company said in each report that it was likely that medical costs could continue to be an issue.
In its first-quarter report, CVS said it was lowering profit and cash-flow guidance “to reflect the assumption that the majority of this pressure will persist throughout 2024.”
Business Spotlight: Health Insurance Costs, Medicare Advantage Star Rating
CVS reported a medical benefit ratio (MBR) that was nearly 6% higher year-over-year in the first quarter, thanks to the higher medical costs that the company attributed to increased Medicare use and “the unfavorable impact” of the company’s Medicare Advantage star ratings .
Medical costs remaining high in CVS Health’s second-quarter report could again cut into the company’s profit margins and its stock price.
CVS shares rose 1.3% to $58.57 by 3 p.m. ET Tuesday but have lost more than a quarter of their value so far this year.