CVS Health’s 3Q profit jumps, but revenue disappoints
CVS Health Corp. missed Wall Street’s revenue expectations in the third quarter, despite sales jumping due to acquisitions. The company trimmed its profit forecast for this year, triggering a stock sell-off.
The drugstore chain and pharmacy benefits manager also noted significant headwinds that forced it to reduce its 2016 profit forecast by a nickel per share.
Those include a soft seasonal business, slowing prescription growth in the overall market and recent pharmacy network changes expected to reduce the number of prescriptions filled at its pharmacies this year. Those network changes will have a bigger effect in 2017, CVS predicted.
Its shares fell $9.86, or 11.8 percent, to close at $73.53, with trading volume reaching nearly 10 times the daily average. The operator of the second-largest U.S. drugstore chain reported a 23.5 percent boost in profit to $1.54 billion, or $1.43 per share.
Earnings, adjusted for one-time gains and costs, were $1.64 per share, topping Wall Street forecasts of $1.57 per share.
Quarterly revenue jumped 15.5 percent to $44.62 billion, getting a lift from a boost in prescription volume and higher retail sales at its drugstores. Still, that missed Street expectations for revenue of $45.31 billion.