What to Know Ahead of CVS Earnings Report
CVS Health will announce its second-quarter earnings before the market opens on Wednesday. This follows a challenging first quarter that saw CVS’s stock plunge nearly 17%, marking its worst day of the year.
Analysts anticipate Q2 revenue to rise to $91.54 billion from $88.92 billion a year prior, according to Visible Alpha. However, despite the revenue increase, profit is expected to decline, similar to the first quarter. CVS attributes this to elevated medical costs associated with health insurance claims.
For Q2 2024, analysts project:
- Revenue: $91.54 billion (up from $88.44 billion in Q1 2024 and $88.92 billion in Q2 2023)
- Diluted EPS: $1.34 (down from 88 cents in Q1 2024 and $1.48 in Q2 2023)
- Net Income: $1.69 billion (up from $1.12 billion in Q1 2024 but down from $1.91 billion in Q2 2023)
CVS has reduced its full-year earnings per share (EPS) forecasts in its past two reports due to higher-than-expected insurance payouts. Increased healthcare use and higher medical costs, particularly within Medicare, have contributed to this pressure.
The company has indicated that it expects these challenges to persist through 2024, impacting both profit margins and cash-flow guidance.
As of Tuesday afternoon, CVS shares were up 1.3% to $58.57 but have declined by over 25% this year. High medical costs and unfavorable Medicare Advantage star ratings continue to weigh on the company’s financial performance.
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