CVS Health Corp. on Tuesday gave a soft earnings outlook for its
current quarter, while growing sales of prescription drugs
continued to offset weakness in its retail business for the second
quarter.
For the current quarter, CVS forecast earnings of $1.27 to $1.30
a share. Analysts polled by Thomson Reuters had forecast $1.37 a
share in earnings.
For the year, CVS narrowed its earnings guidance to $5.11 to
$5.18 a share from $5.08 to $5.19 a share.
In the latest quarter, the company's pharmacy services business,
which provides health-care benefits to clients, continued to log
strong growth. Sales rose 12% to $24.4 billion, driven by growth in
specialty pharmacy and pharmacy network claims.
That came as sales in the chain's retail business grew just 2.2%
to $17.2 billion, or increased 0.5% excluding newly opened or
closed stores. CVS's move last fall to stop selling tobacco
products to emphasize its image as a health-care company hurt sales
in the front of its stores, where the company sells everyday
products and over-the-counter medication. They fell 7.8% in the
quarter on a same-store basis.
As part of its shifting identity, CVS is expanding its walk-in
clinics and its specialty pharmacy business. The company hopes
ending tobacco sales will eventually pay off by having clients
reward it with health-related business.
Overall, CVS reported a profit of $1.27 billion, or $1.12 a
share, up from $1.25 billion, or $1.06 a share, a year earlier.
Excluding acquisition costs and other special items, per-share
earnings were $1.22. The company had forecast $1.17 to $1.20 in
adjusted per-share earnings.
Revenue grew 7.4% to $37.17 billion. Analysts polled by Thomson
Reuters had forecast $37.18 billion.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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