CVS Health third-quarter earnings fell far short of a Wall Street estimate, but revenues beat expectations as the company embarked on a restructuring initiative.
Company net income was $87 million, or seven cents per diluted share, versus $2.26 billion, or $1.75 per diluted share, in the year-previous quarter, while earnings adjusted for one time events came in at $1.37 billion, or $1.09 per adjusted diluted share, versus $2.85 billion, or $2.21 per adjusted diluted share, the company reported.
A Yahoo Finance-published analyst consensus estimate was for $1.51 per diluted share while revenues were for $92.75 billion.
Total revenues were $95.43 billion versus $89.76 billion in the year-earlier quarter. Operating income was $832 million versus $3.69 billion in the quarter a year before, while adjusted operating income was $2.55 billion versus $4.46 billion.
In the Pharmacy & Consumer Wellness segment, CVS net revenues were $32.42 billion versus $28.87 billion in the year-prior quarter while adjusted operating income was $1.6 billion versus $1.39 billion in the year-past period, the company noted. Front store comparable sales, including general merchandise, slipped 1.1% during the quarter year over year.
CVS reported it finalized during the third quarter an enterprise-wide restructuring plan intended to streamline and simplify the company’s organization, improve efficiency and reduce costs. In connection with the plan, during the three months ended September 30, 2024, CVS recorded restructuring charges of approximately $1.2 billion, comprised of a $607 million store impairment charge for additional retail pharmacy stores it plans to close during 2025, $293 million of costs associated with corporate workforce optimization, including severance and employee-related costs, and $269 million of other asset impairments and related charges associated with discontinuation of certain non-core assets.
In announcing the financial results, David Joyner, CVS Health President and CEO, said, “Our integrated model accelerates our ability to uniquely do what is most important to today’s health care consumers: deliver lower cost of care, a simpler experience and better outcomes. Our third-quarter results reflect strong performance in the Health Services and Pharmacy & Consumer Wellness segments, and also highlight the continued need to work across our enterprise and address macro challenges to the Health Care Benefits segment. My commitment to our CVS Health colleagues and our customers is to drive focused execution of our integrated strategy to improve the health of the 185 million people we are privileged to serve.”
