CVS Health (NYSE:CVS) reported second-quarter earnings that beat analyst expectations, but shares fell 2.7% as the company cut its full-year guidance, citing continued pressure in its Health Care Benefits segment.
The healthcare giant reported adjusted earnings per share (EPS) of $1.83 for Q2, surpassing the analyst estimate of $1.73. However, revenue came in at $91.2 billion, slightly below the consensus estimate of $91.43 billion, though it represented a 2.6% increase YoY.
CVS Health revised its full-year 2024 adjusted EPS guidance to a range of $6.40 to $6.65, down from its previous forecast of at least $7.00 and below the analyst consensus of $6.97. The company also lowered its cash flow from operations guidance to approximately $9.0 billion from at least $10.5 billion previously.
Karen S. Lynch, CVS Health President and CEO, commented on the results: "We are taking action today to ensure we make the most of our many opportunities, including leadership changes in the Health Care Benefits segment."
The company attributed the guidance cut to continued pressure in the Health Care Benefits segment, which experienced a decline in operating results due to utilization pressure and the unfavorable impact of Medicare Advantage star ratings for the 2024 payment year.
Despite the challenges, CVS Health reported strong performance in its Health Services and Pharmacy & Consumer Wellness segments, which partially offset the pressure in Health Care Benefits.
The company's total revenues for the quarter increased primarily due to growth in the Health Care Benefits and Pharmacy & Consumer Wellness segments, while the Health Services segment saw a decline.
CVS Health's adjusted operating income decreased by 16.4% in Q2, primarily driven by declines in the Health Care Benefits and Pharmacy & Consumer Wellness segments, partially offset by an increase in the Health Services segment.