CVS Health Stock Rises After Q3 Earnings Report, New Leadership Announcements: But Retail’s Wary

Shares of CVS Health Corp ($CVS) soared over 5% in Wednesday’s pre-market trade after the firm reported its third-quarter results that saw revenue top Wall Street estimates but earnings falling short of expectations.

CVS’ third-quarter (Q3) revenues rose 6.3% year-over-year (YoY) to $95.4 billion, higher than an analyst estimate of $92.72 billion. Adjusted earnings per share came in at $1.09 versus an estimate of $1.44.

CEO David Joyner highlighted that the Q3 results reflect strong performance in the Health Services and Pharmacy & Consumer Wellness segments, but noted there is a continued need to work across the enterprise and address macro challenges to the Health Care Benefits segment.

The Health Care Benefits segment saw its revenue grow 25.5% YoY to $32.99 billion driven by growth in the Medicare and Commercial product lines.

However, the Health Services segment witnessed a 5.9% decline in revenue to $44.13 billion, primarily driven by the previously announced loss of a large client and continued pharmacy client price improvements.

The Pharmacy & Consumer Wellness segment recorded a 12.3% rise in revenue to $32.42 billion, led by increased prescription volume, including increased contributions from vaccinations, and pharmacy drug mix.

CVS Health had finalized an enterprise-wide restructuring plan aimed at streamlining and simplifying the organization, improving efficiency and reducing costs. As part of this plan, the firm recorded restructuring charges of approximately $1.2 billion.

This comprised a $607 million store impairment charge for additional retail pharmacy stores it plans to close in 2025, $293 million of costs associated with corporate workforce optimization, and $269 million of other asset impairments and related charges associated with the discontinuation of certain non-core assets.

Meanwhile, the firm also announced certain leadership appointments on Wednesday. Prem Shah has been appointed as the Group President while Steve Nelson has been appointed as the President of insurance entity Aetna. Both Shah and Nelson will report to CEO Joyner.

Recent retail chatter on Stocktwits mostly implied a negative take on the stock.

For updates and corrections email newsroom@stocktwits.com

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