CVS Health Reported Another Stellar Quarter Despite Busy Acquisitions, but Disappointed by Guidance

CVS Health (CVS) stock is retreating more than 1.5% in premarket trading, being mostly affected by uncertainties over Fed’s rate decision tonight, rather than its freshly published quarterly results showing total revenues of $85.28 billion posted an 11% annual increase over the $76.83 billion.

Although Q1 2023 results topped earnings and sales expectations, the company lowered its FY earnings forecast due to costs related to recent acquisitions.

Here's how the CVS report compared to Wall Street expectations:

• Earnings per share came in at $2.20 adjusted vs. $2.09 expected
• Revenue landed at $85.28 billion vs. $80.81 billion expected
• For Q1, CVS reported earnings of $2.14 billion, or $1.65 a share, compared with $2.35 billion, or $1.77 a share, a year earlier.

During the reporting quarter, CVS Health completed ~$10.6 billion acquisition of primary care provider Oak Health that it had announced in February. It also closed an approximately $8 billion deal to buy home health care provider Signify Health in March.

However, as it was mentioned above, CVS cut its 2023 adjusted earnings guidance to a range of $8.50 to $8.70, down 20 cents from its previous guidance of $8.70 to $8.90. That’s also short of the $8.76 according to previous consensus estimate.