CVS Health's fourth-quarter profit fell as the drugstore chain and pharmacy benefit management company dealt with higher operating costs. Still, adjusted earnings and sales beat Wall Street expectations.
The Woonsocket, R.I.-based company also lowered its full-year adjusted profit forecast, citing the possibility of higher medical costs.
For the three months ended Dec. 31, CVS Health earned $2.05 billion, or $1.58 per share. In the same period last year, the company earned $2.33 billion, or $1.77 per share.
Excluding certain items, earnings were $2.12 per share. This beat the $2.01 per share expected by analysts surveyed by Zacks Investment Research.
Sales rose to $93.81 billion from $83.85 billion, beating analysts' expectations for sales of $90.8 billion.
Shares rose slightly before the market opened on Wednesday.
CVS Health Corp. operates one of the nation's largest drugstore chains and a large pharmacy benefit management business that provides prescription drug coverage for large customers such as insurance companies and employers.
The company also sells health insurance through its Aetna division and is increasing the amount of medical care it provides through its stores and clinics.
Last fall, company executives expressed caution about the outlook for 2024. The company told analysts at the time that a downgrade in its Medicare Advantage health insurance plan would have a negative impact on its business.
Medicare Advantage plans are the private version of the government's Medicare program, primarily for people age 65 and older. These plans, which began to be developed last year, have seen a sharp increase in the use of nursing care.
CVS Health officials said in November that investors should set their expectations for 2024 adjusted earnings at the lower end of the range of $8.50 to $8.70 per share. This is also the company's forecast for full year 2023 profit. CVS Health currently expects 2024 adjusted earnings to be at least $8.30 per share for him.
Analysts surveyed by FactSet expected full-year earnings of $8.47 per share.
The pharmacy industry has recently been grappling with several issues, including rising costs and an increasing number of employees. protests Opioid-related litigation. In October, drugstore workers across the country began calling in sick to highlight the lack of support from their employers. It involved pharmacists and technicians, primarily from major retailers such as Walgreens and CVS Health.
The same month, Rite aid filed for bankruptcy protection and announced plans to sell parts of its business as it attempts to rebuild while dealing with losses and opioid-related lawsuits.
