CVS Health (NYSE:CVS) on Wednesday reported fourth-quarter revenue and adjusted earnings that topped expectations, but the company cut its full-year profit outlook, citing higher medical costs that are dogging the broader insurance industry.
The company lowered its 2024 adjusted earnings forecast to at least $8.30 per share, down from a previous guidance of at least $8.50 per share. Analysts surveyed by LSEG were expecting full-year adjusted earnings of $8.49 per share.
CVS also cut its unadjusted earnings guidance to $7.06 per share, down from at least $7.26 per share.
The company said its new guidance follows a review of its medical cost trend analysis for the fourth quarter and a recognition of the “potential implications” for elevated medical cost trends in 2024. CVS owns health insurer Aetna.
Insurers such as Humana have been seeing medical costs spike as an increasing number of older adults return to hospitals to undergo procedures they had delayed during the pandemic, such as joint and hip replacements.
Earnings per share turned out to be $2.12 adjusted, in contrast with the $1.99 expected, on revenue of $93.81 billion vs. $90.41 billion expected.
The company reported net income of $2.05 billion, or $1.58 per share, for the fourth quarter. That compares with a net income of $2.33 billion, or $1.77 per share, for the same period a year ago.
CVS shares tacked on $2.23, or 3%, to begin the mid-week session at $76.00
