CVS Q3 Earnings: What To Expect?

by Trefis Team
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CVS Health (NYSE:CVS) is slated to announce its third quarter results on Tuesday, November 8th before the markets open. In the current quarter, we expect the company to show an uptick in revenues – aided by strong volumes and growth in Medicare Part C Plans – as well as margins, aided by volume growth and the completion of the acquisition of Target’s pharmacies.

Following its second quarter earnings, the company released a strong outlook for the third quarter, in which it expected revenues to grow in the range of 16.5% to 17.75% over the same period last year. Per the company’s guidance, Retail Pharmacy revenues are expected to grow by 11.5% to 13% over the prior year quarter, aided by a 1% to 2.25% surge in same store sales, while Pharmacy Services are expected to grow by 21.25% to 22.5% over the same period last year. [1].

Screen Shot 2016-11-07 at 16.55.27

CVS’s Pharmacy Services division, the company’s main revenue contributor, continues to grow at a faster pace than the company’s other divisions, driven by an aging population and growing spending on specialty drugs. Moreover, the acquisitions of Omnicare and Target pharmacies have helped the company increase its store count in the country, aiding in new customer addition and significantly boosting revenue and prescriptions filled.

In the upcoming Q3 results, analyst consensus expect CVS’s revenues to be $45.4 billion, an uptick of 17.5% over the prior year quarter, and adjusted EPS to be $1.57, an uptick of 21.7% over the same period last year.

Screen Shot 2016-11-07 at 16.44.17

 


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Notes:
  1. CVS Earnings Call Slides, CVS Investor Relations, August 2 2016 []
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