CVS Health‘s fourth-quarter profits decline due to increased operating costs
CVS Health, based in Woonsocket, Rhode Island, reported a decrease in its fourth-quarter profits as the drugstore chain and pharmacy benefits manager struggled with higher operating costs. Despite this decline, the company’s adjusted profit and revenue surpassed Wall Street’s expectations.
For the three months ending on December 31, CVS Health earned $2.05 billion, or $1.58 per share, compared to $2.33 billion, or $1.77 per share the previous year. However, stripping out certain items, earnings were $2.12 per share, exceeding the $2.01 per share predicted by analysts.
The company’s revenue increased to $93.81 billion from $83.85 billion, surpassing analysts’ estimates of $90.8 billion. The positive results caused shares to rise slightly before the market opening on Wednesday.
CVS Health Corp. is known for operating one of the nation’s largest drugstore chains and a significant pharmacy benefit management Business. Additionally, it provides health insurance through its Aetna arm and offers healthcare services through its stores and clinics.
In November, company leaders expressed caution about the outlook for 2024, citing a potential decline in ratings for the company’s Medicare Advantage health insurance plans. CVS Health now forecasts adjusted earnings of at least $8.30 per share for 2024, lower than the previously expected range of $8.50 to $8.70 per share.
The pharmacy industry has been facing various challenges in recent months, including rising costs, employee protests, and opioid-related lawsuits. In October, drugstore workers across the country called in sick to protest the lack of support from their employers. Also in October, Rite Aid filed for bankruptcy protection and announced plans to restructure amidst losses and opioid-related lawsuits.
The historic background of this topic includes the ongoing challenges faced by the pharmacy industry, including the changing landscape of healthcare and the rise of healthcare-related litigation. It also reflects the impact of the COVID-19 pandemic on healthcare costs and operations.
In conclusion, despite the challenges faced by CVS Health, the company remains a major player in the healthcare industry and continues to adapt to the evolving landscape of healthcare services and pharmacy management.
Read More Health News
