CVS Health (CVS, Financial) saw its stock price increase by over 7% after reporting first-quarter earnings and revenue that surpassed market expectations. The company also raised its full-year adjusted earnings per share (EPS) forecast to a range of $6 to $6.20, up from the previous $5.75 to $6 estimate. This improvement is attributed to a better performance in its struggling insurance segment.
However, CVS revised down its GAAP diluted EPS guidance due to legal expenses related to its pharmacy services subsidiary, Omnicare. A recent jury decision found Omnicare liable for dispensing medications to elderly and disabled individuals in nursing homes and long-term care facilities without valid prescriptions. CVS plans to appeal the decision.
While no full-year revenue forecast was provided, CVS expressed caution for the remainder of the year due to persistent high medical costs and potential macroeconomic challenges. CEO David Joyner emphasized a careful competitive strategy in target markets and budgeting for higher medical cost trends, which the company anticipated.
