CVS stock surges 4.6% after second-quarter earnings beat

Shares of CVS Health Corp. rose 4.6% in premarket trade Wednesday after the drugstore chain reported earnings that topped Wall Street expectations. Profit in the latest quarter rose to $1.94 billion, or $1.49 a share, compared with a loss of $2.56 billion, or a loss of $2.52 a share, in the year-earlier quarter. Adjusted per-share earnings were $1.89 a share, beating the FactSect consensus of $1.69 a share. Revenue grew 35% to $63.43 billion from $46.92 billion, ahead of the FactSet consensus of $62.63 billion. Revenue from the company's pharmacy services segment grew 4.2% to $34.84 billion from $33.43 billion primarily due to brand-name drug-price inflation and higher pharmacy claims volume. Those gains were partially offset by continued price compression and increased generic dispensing, CVS said. The retail segment brought in $21.45 billion compared with $20.67 billion a year ago, driven by higher prescription volumes and inflation in brand-name drug prices. Revenue from CVS's health-care benefits business grew to $17.4 billion from $764 million a year ago, due to the company's acquisition of health-insurer Aetna. CVS raised and narrowed its full-year guidance for adjusted EPS to between $6.89 and $7.00 from between $6.75 and $6.90. "We posted strong second quarter results, with all of our businesses performing at or above expectations," CVS Chief Executive Larry Merlo said in a statement. Shares of CVS have fallen 17.6% in the year to date through Wednesday, while the S&P 500 has gained 15% and the Dow Jones Industrial Average has gained 11.6%.

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