CVS Health reported surprisingly strong second-quarter earnings as people postponed elective medical procedures during the COVID-19 pandemic, and it raised its profit expectations for the year.
The postponed procedures led to lower benefit costs for the company's Aetna insurance arm, a main reason net income jumped 55% to $2.97 billion in the quarter, the company said Wednesday.
The virus outbreak shut down most of the economy in the second quarter, which meant fewer surgery bills or other big claims. At least some of those postponed procedures are expected to ramp up again this year.
The care delays also hurt CVS Health's drugstore business because fewer patients filled new prescriptions after making a trip to the doctor's office.
CVS Health operates one of the nation’s largest drugstore chains with about 9,900 retail locations. It also runs prescription drug plans for big clients like insurers and employers through a large pharmacy benefit management business in addition to selling insurance.
The Woonsocket, Rhode Island, company posted earnings adjusted for one-time gains and costs of $2.64 per share in the quarter that ended June 30.
That's better than the $1.93 per share analysts polled by Zacks Investment Research predicted.
Total revenue climbed 3% to $65.34 billion, which also topped expectations.
The company saw total pharmacy claims rise more than 3% for its pharmacy management business. But the drugstore side filled fewer prescriptions and also saw a drop in revenue from store areas outside the pharmacy, due to fewer customer visits.
CVS now anticipates full-year adjusted earnings between $7.14 and $7.27 per share, up from its previous forecast for $7.04 to $7.17 per share.
Analysts expect, on average, earnings of $7.14 per share, according to FactSet.
Shares of CVS Health Corp. slipped 87 cents to $64.11 in afternoon trading as broader indexes rose. The stock had fallen about 12% so far this year as of Tuesday.