CVS Health reported surprisingly strong second-quarter earnings as people postponed elective medical procedures during the pandemic, and it raised its profit expectations for the year.
The postponed procedures led to lower benefit costs, CVS said Wednesday.
The virus outbreak shut down most of the economy in the second quarter, which meant fewer surgery bills or other big claims. At least some of those postponed procedures are expected to ramp up again this year.
For the three months ended June 30, CVS earned $2.99 billion, or $2.26 per share. A year earlier the Woonsocket, Rhode Island, company earned $1.93 billion, or $1.49 per share.
Adjusted for one-time gains and costs, earnings were $2.64 per share. That’s better than the $1.93 per share analysts polled by Zacks Investment Research predicted.
CVS Health operates one of the nation’s largest drugstore chains with about 9,900 retail locations. It also runs prescription drug plans for big clients like insurers and employers through a large pharmacy benefit management business, and the company sells health insurance through its Aetna arm.
Revenue was $65.34 billion, topping the $64.09 billion Wall Street expected.
CVS said that the pandemic did trim revenues in its retail and pharmacy business because fewer doctors visits by potential customers meant fewer prescriptions fulfilled. Retail revenue, that made outside the pharmacy, also slipped with so many people sheltering in place.
CVS now anticipates full-year adjusted earnings between $7.14 and $7.27 per share. It previously predicted $7.04 to $7.17 per share.
Shares rose 3% before the opening bell.