CVS raises outlook on COVID-19, Medicare products

CVS Health hiked its 2021 forecast and beat Wall Street's first quarter as a growing insurance business countered hits the health care giant took from a weak cold and flu season.

The company covered more people through Medicaid and Medicare Advantage, as adjusted operating earnings from health insurance jumped nearly 20% in the first quarter to $1.78 billion.

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But sales in both the company's drugstores and from its pharmacy benefits management business were trimmed by the weak cough, cold and flu season, which was brought on in part by mask wearing and social distancing during the COVID-19 pandemic.

Drugstores also faced a tough sales comparison to last year’s first quarter, when customers stocked up on pharmacy supplies as the pandemic set in.

Overall, CVS Health said its net income jumped nearly 11% to $2.22 billion in the quarter that ended March 31. Earnings adjusted for one-time gains and costs totaled $2.04 per share, and revenue grew more than 3% to $69.1 billion.

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That easily beat average expectations of $1.72 per share in earnings on $68.44 billion in revenue, according to a survey by Zacks Investment Research.

CVS Health started 2021 with an earnings forecast that largely fell short of Wall Street expectations. But it said Tuesday that it now expects adjusted per-share earnings to range from $7.56 to $7.68 in 2021.

Analysts are looking for $7.53 per share, on average, according to a survey by FactSet.

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CVS Health operates one of the nation’s largest drugstore chains with nearly 10,000 retail locations. It also runs prescription drug plans for big clients like insurers and employers through a large pharmacy benefit management business, and the company sells health insurance through its Aetna arm.

Shares of Woonsocket, Rhode Island-based CVS Health Corp. rose nearly 3% before the opening bell.