CVS Q3 earnings, sales beat estimates; to close 22 stores next year

CVS Health Corp. reported third-quarter revenue and earnings that beat expectations, boosted by its acquisition of insurance giant Aetna. 

The drug store and health services company disclosed in a regulatory filing it will close 22 “underperforming” drug stores early next year. The shutterings are in addition to the 46 stores CVS closed earlier this year.

“We believe these decisions will generate enhanced longer-term performance,” CFO Eva Boratto told analysts Wednesday on CVS’ quarterly call. “Our real estate footprint remained very productive, and we will look for opportunities to further improve the performance in our portfolio.”

CVS’ net income rose 10% to $1.53 billion, or $1.17 a share, in the quarter ended Sept. 30, from $1.39 billion, or $1.36 a share, in the year-ago period. Adjusted earnings per share $1.84, easily topping analysts’ estimates of $1.77. 

Total revenue grew to $64.81 billion from $47.49 billion, beating estimates $62.99 billion. Revenues in the retail segment increased 2.9%, driven by increased prescription volume and brand name drug price inflation. Same-store sales rose 3.6% 

“Our third-quarter results build on the positive momentum we have seen across the company since the beginning of the year,” said CEO Larry Merlo. “All of our core businesses performed in line with or above expectations, reflecting strong operational execution. As a result, we delivered strong growth and generated robust operating cash flow, which enabled us to continue to deliver while returning capital to our shareholders.”

The company raised its adjusted EPS guidance range to $6.97 to $7.05 from $6.89 to $7.00.