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CVS Health Tops Q4 Earnings, Misses on Revenues

Zacks Equity Research

Ever bought medicines or cosmetics over the counter? Yes, then you may have walked into one of the 9,652 retail CVS/pharmacy stores of the largest pharmacy healthcare services provider in the U.S. –CVS Health Corporation CVS . This Rhode Island-based company’s more than 900 walk-in medical clinics–CVS/Minute Clinic currently possess a customer satisfaction rate of 95%.

Currently, CVS Health has a Zacks Rank #3 (Hold) but that could change following its fourth quarter and full-year 2016 earnings report which has just released. (You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here). We have highlighted some of the key details from the just-released announcement below:

Earnings: The Zacks Consensus Estimate remained steady at $1.67 per share over the last 60 days.CVS Health’s fourth quarter adjusted earnings per share of $1.71 beat this estimate by 2.4% and grew 11.8% year over year (y/y).

Full-year 2016 adjusted earnings came in at $5.84 per share which has also surpassed the Zacks Consensus Estimate of $5.80.

CVS Health Corporation Price and EPS Surprise

CVS Health Corporation Price and EPS Surprise | CVS Health Corporation Quote

Revenues: CVS Health posted fourth quarter revenues of $45.97 billion, up 11.7% y/y, but missed the Zacks Consensus Estimate for revenues of $46.69 billion.

Full-year 2016 revenues came in at $177.52 billion which also lagged behind the Zacks Consensus Estimate of $178.03 billion.

Key Stats: For the fourth quarter CVS Health’s Pharmacy Services segment revenues increased 17.9% to $31.3 billion, while revenues from Retail/LTC segment improved 4.7% year over year to $20.8 billion. During the fourth quarter, CVS Health opened 40 new retail stores and closed 25 retail stores. Further, the company relocated 16 retail stores. As of Dec 31, 2016, CVS health operated 9,709 retail stores, including pharmacies in Target stores, in 49 states, the District of Columbia, Puerto Rico and Brazil.

Major Factors: CVS Health exited the fiscal 2016 on a mixed note, with its bottom-line exceeding the Zacks Consensus Estimate, while the top-line missing the same. Moreover, management issued guidance for 2017 which is encouraging. For the fourth quarter, the generic dispensing rate increased 170 basis points to 85.4% in the Pharmacy Services Segment and 120 basis points to 85.2% in the Retail/LTC Segment.

Stock Price: Following the earnings release, share prices rose 2.04% in the pre-market trading session.

Check back later for our full write up on this CVS Health earnings report later!

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