CVS Health tops expectations amid increased demand for COVID vaccinations, tests

CVS Health Corp. reported better-than-expected earnings and sales as customers flocked to its stores for COVID vaccinations and at-home tests.

The health care and pharmacy retailer’s net income rose to $1.31 billion, or $0.98 a share, in the quarter ended Dec. 31, from $973 million, or $0.74 a share, in the year-ago period. Adjusted earnings per share of $1.98 topped analysts’ estimates of $1.83.

Revenue rose 10.1% to $76.60 billion, beating estimates $75.66 billion. CVS same-store sales rose 13.4% in the quarter amid higher prescription volumes, front-of-store sales and a big jump in vaccinations. The company said it administered more than 20 million COVID-19 vaccines during the quarter (up from 11.6 million in the third quarter) and more than 8 million COVID-19 tests

CVS has been repositioning itself with a strong health care focus. It plans to close some 900 of its approximately 10,000 stores during the next three years as it creates three distinct store formats to drive higher engagement with consumers and serve as community health destinations.

[Read More: CVS shifts focus to omnichannel healthcare; raises 2021 guidance]

Among CVS's business segments, Health Care Benefits revenue rose 8.4% to $20.70 billion, Pharmacy Services sales increased 8.2% to $39.34 billion and Retail/LTC sales grew 12.7% to $27.11 billion.

For 2022, the company affirmed its adjusted earnings per share guidance range of $8.10 to $8.30. But it lowered its cash flow outlook to $12.0 billion to $13.0 billion from $12.5 billion to $13.0 billion.