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CVS inventory is falling after earnings.
Bryan Bedder/Getty Images for CVS Pharmacy
CVS Health
inventory was falling after lowered cash-flow steerage overshadowed better-than-expected fourth-quarter earnings Wednesday.
The pharmacy chain reported fourth-quarter income of $76.6 billion, beating the FactSet consensus of $75.6 billion. Adjusted earnings per share had been $1.98, which topped the FactSet consensus of $1.83.
But CVS trimmed the 2022 steerage for money stream from operations to $12.0 billion-$13.0 billion from $12.5 billion to $13.0 billion. The firm confirmed 2022 steerage for adjusted EPS of $8.10 to $8.30, and income steerage for $304 billion to $309 billion.
CVS advised Barron’s in an electronic mail that it trimmed the low finish of cash-flow steerage for 2022 “due to faster collection and some pull-forward of receivables” in 2021.
Shares are down 4.3% to $106.07 in Wednesday morning buying and selling on a robust day for the broader market: the
S&P 500 index is up 1.2%.
In reality, the inventory was the worst performer within the index Wednesday, and was on tempo for largest % lower since Feb. 16, 2021, when it fell 4.96%, in response to Dow Jones Market Data.
Fourth-quarter same-store gross sales within the pharmacy section had been up 8.8% from final 12 months and same-store retail gross sales rose 12.3%. Both had been bolstered by the corporate’s administration of 11 million Covid-19 vaccinations and eight million checks over the three-month interval.
For the total 12 months 2021, CVS administered greater than 32 million COVID-19 checks and greater than 59 million vaccines. Over 35% of COVID-19 vaccines in 2021 had been administered throughout the fourth quarter, the corporate stated on an earnings name with buyers Wednesday morning.
The firm stated it plans to mix its segments together with drugstores, its insurance coverage enterprise, Aetna, and pharmacy advantages supplier Caremark to develop into extra reasonably priced well being care-related alternatives for shoppers.
CEO Karen Lynch stated that the corporate’s wide-ranging vaccine administration led to new prospects in search of a spread of different well being providers at CVS.
CFO Shawn Guertin stated providers that stretch the care sector, significantly for Medicare prospects, would take advantage of sense and can be excessive on the record for the corporate’s enlargement priorities. Details weren’t given on numbers or plans concerning the alternatives.
CVS was additionally no stranger to the tight labor market in current quarters. In August, the corporate stated that it will likely be elevating its wages to $15 an hour by July 2022.
“We did have significant hiring throughout the year, and as you might imagine, we weren’t immune to some of the Omicron issues,” Lynch stated. “I think the minimum wage that we mentioned that we put in place has helped us. Keep in mind that I continue to evaluate that minimum wage to see if there’s more that we could or should be doing as we continue to address labor shortages in the country.”
Write to Logan Moore at logan.moore@barrons.com