CVS Health Corp (NYSE: CVS) shared its results for the fourth quarter of 2024, and the numbers reflect a strong financial position. Adjusted earnings per share (EPS) hit $1.19, with adjusted operating income reaching $2.7 billion. Revenues approached $98 billion, marking a 4% rise from the previous year.
CVS reported around $9.1 billion in cash flow from operations for the entire year. In the Health Care Benefits division, revenue was about $33 billion, showing a significant 23% increase year-over-year. Medical membership numbers were stable, with around 27.1 million members, but the medical benefit ratio rose to 94.8%, up 630 basis points from the prior year.
In other areas, Health Services revenue was about $47 billion, down 4% from the previous year. However, revenue from the Pharmacy and Consumer Wellness segment grew to over $33 billion, a 7% increase. Same-store pharmacy sales went up by 13%, and prescription volumes rose nearly 6%.
CVS completed its three-year store closure plan, managing to keep over 27% of the pharmacy market share. For 2025, the company expects adjusted EPS to be between $5.75 and $6.00. In terms of future guidance, CVS predicts Health Services revenue around $185 billion and Pharmacy & Consumer Wellness revenue about $134 billion. Cash flow from operations is expected to be roughly $6.5 billion.
Looking ahead, CVS is dedicated to stabilizing its Aetna business, especially in Medicare Advantage, where they anticipate improvements in profit margins. They’ve introduced new pricing models for greater transparency and affordability, which they believe will drive further growth.
Although CVS is making strides, challenges remain. The Health Care Benefits segment reported an adjusted operating loss of $439 million due to a higher medical benefit ratio. They expect overall membership to drop by over 1 million, impacting their Individual Exchange and Medicare products. Elevated medical costs also pose hurdles, particularly in the Medicare Advantage sector.
David Joyner, the new CEO, expressed a focus on enhancing financial discipline while navigating the healthcare landscape. He noted the importance of establishing trust and credibility as CVS moves forward in 2025.
As CVS continues to adapt, they remain focused on their strategic priorities and maintaining a strong market position in the competitive healthcare environment.
For a complete understanding of CVS’s financial performance, consider examining their full earnings call transcript.
This information first appeared on GuruFocus.
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Medicare Advantage, CVS Pharmacy, CVS Health, Revenue Guidance
