CVS Health missed first-quarter expectations and cut its 2024 outlook more than a dollar below Wall Street forecasts.
Shares of the healthcare giant plunged Wednesday morning after the company said it was still grappling with rising healthcare utilization costs in its Medicare Advantage business.
Medicare Advantage plans are private versions of the federal government’s Medicare program for people age 65 and older.
CVS Health said it now expects adjusted profit of at least $7, down from its previous forecast of at least $8.30.
For the full year, analysts expect earnings of $8.27 per share, according to FactSet.
The reduction in forecasts was much larger than expected, according to analyst Michael Cherny of Leerink. He said in a research note that this raises questions about how the company will achieve its previously stated goal of double-digit earnings per share growth next year.
In the first quarter, CVS Health reported adjusted earnings of $1.31 per share on total revenue of $88.4 billion.
Analysts were expecting earnings of $1.69 per share on revenue of $89.33 billion for the first quarter, according to FactSet.
CVS Health Corp. operates one of the nation’s largest pharmacy chains and a massive pharmacy benefits management business that manages prescription drug coverage for large clients like insurers and employers. It also sells health insurance through its Aetna arm.
Shares of the Woonsocket, Rhode Island-based company were down 11% at $60 in premarket trading.
ABC News
