CVS Health Q4 sales, earnings top estimates; announces leadership changes
CVS Health ended its fiscal year on an upbeat note, with sales and earnings that beat Street estimates amid gains from its acquisition of health insurance giant Aetna.
The company also announced several leadership changes, including the appointment of Alan Lotvin, M.D., currently executive VP at CVS Health, as president of CVS Caremark. In his new role, he succeeds Derica Rice, who is leaving CVS.
CVS Health reported net income of $1.75 billion, or $1.33 a share, in the quarter ended Dec. 31, compared to a net loss of $419 million, or $0.37 cents a share, in the year-ago period, which included a $2.2 billion charge related to the Aetna acquisition. Excluding the charge and other non-recurring items, adjusted earnings per share were $2.14, beating analysts’ estimates of $1.68.
Total revenue rose 22.9% to $66.89 billion, beating estimates of $63.93 billion. Revenue in the company’s pharmacy services division rose 6.2% to $37.07 billion. Revenue in the retail segment increased 2.5% to $22.58 billion, with front store sales representing approximately 22.7% of the total.
CVS’s healthcare benefits business soared as revenue more than doubled to $17.15 billion, fueled by CVS’s acquisition of Aetna.
“Our fourth quarter and full-year financial results reflect strong financial and operational execution and a successful first year of integrating the Aetna business,” said president and CEO Larry Merlo. “We’re using our unmatched capabilities to create a higher-quality, simpler and more affordable health care experience, which benefits patients, clients and consumers and positions the company for continued success.”
For 2020, CVS expects adjusted EPS of $7.04 to $7.17.
In other leadership changes at CVS:
• Jonathan Mayhew was appointed executive VP, transformation, and will be responsible for the transformation product portfolio. Most recently, he served as senior VP for the Aetna Markets organization.
• Alec Cunningham was appointed executive VP and COO for the Aetna business and will lead an expanded organization that will focus on Medicare Advantage and government programs overall – an area of growing importance. Cunningham joined CVS Health last year from Concerto Healthcare.