CVS Health Corp. (CVS, Financial), the large U.S. retail pharmacy and health care company, posted results for the final trimester of 2018 on Wednesday before market open.
CVS Health Corp. beat consensus by 5 cents on non-GAAP earnings, reporting a non-GAAP net profit of $2.14 per share, and missed consensus by $2.13 on GAAP earnings, reporting a GAAP loss of 37 cents per share.
CVS Health Corp. recorded an 11.5% year-over-year increase in non-GAAP earnings while GAAP earnings switched to negative from prior-year quarter net profit of $3.22 per share.
Fourth-quarter revenues were $54.42 billion, reflecting 12.5% growth year-over-year. The Woonsocket, Rhode Island-based health care company missed expectations on fourth-quarter revenues by $190 million.
Regarding full 2018, CVS Health Corp. recorded a 5.3% increase in revenues to $194.6 billion, a 109% decline in GAAP earnings from ongoing operations to a loss of 57 cents per share and 20% growth in non-GAAP earnings to $5.90 per share.
The operating cash flow was $8.9 billion, or a 10.7% increase from $8 billion in full 2017, and the free cash flow was $6.8 billion, or 7.5% growth from $6.4 billion in 2017.
Among the company's divisions, revenues for the Pharmacy Services segment increased 2.7% to $134.13 billion. Revenues for the Retail/LTC segment increased 5.8% to nearly $84 billion, and revenues for the Health Care Benefits segment were approximately $5.55 billion. The Health Care Benefits segment was purchased by CVS Health Corp. last year on Nov. 28.
The company closed 2018 with cash and short-term securities of $6.58 billion and total debt of $72.16 billion.
For full-year 2019, the company has guided for GAAP earnings per share of $4.88 to $5.08, non-GAAP earnings per share of $6.68 to $6.88 versus consensus of $7.41, and operating cash flow of $9.8 billion to $10.3 billion.
Shares of CVS Health Corp. were down 8.49% to $63.95 in premarket trading on Wednesday. The share price climbed 7% year to date to $69.88 at close Tuesday. The stock has underperformed the S&P 500 index by 4%. CVS Health Corp. has a market capitalization of roughly $90.37 billion.
The 52-week range is $60.14 to $82.15.
The stock has a forward dividend yield of 2.86% as of Feb. 19.
The recommendation rating is 1.9 out of 5 and the average target price is $88.57 per share.
Disclosure: I have no positions in any security mentioned.
