CVS Health (CVS) shares tick higher on surprise Q2 beat

CVS Health (NYSE: CVS) shares rose modestly in pre-open trading Wednesday after a surprise beat on the top and bottom line in the second quarter and a confirming of its full year adjusted EPS, although GAAP EPS for the year was trimmed.

The pharmacy and healthcare giant reported that adjusted EPS for the quarter fell to $2.21 from $2.53 last year, but beat the consensus of $2.13.

Revenue rose 10.3% to $88.921 billion, beating the consensus of $86.41 billion.

"Our diversified business model delivered strong results this quarter," CEO Karen S. Lynch commented. "We continue to execute on our strategy to expand access to health services across our care delivery channels and strengthen our engagement with consumers to improve their health and well-being."

Looking ahead, the company revised its full year 2023 GAAP diluted EPS guidance range to $6.53 to $6.75 from $6.90 to $7.12. Meanwhile, it confirmed Adjusted EPS guidance range of $8.50 to $8.70, versus the consensus of $8.59. The company also confirmed its full year cash flow from operations guidance range of $12.5 billion to $13.5 billion.

Earlier in the week, reports surfaced that CVS announced plans to cut 5,000 jobs. Analysts at Credit Suisse predicted that the cuts may potentially lead to between $500 million to $750 million in savings for CVS.

In its quarterly report, CVS said during the quarter it developed an enterprise-wide restructuring plan intended to streamline and simplify the organization, improve efficiency and reduce costs. It did not specify the number of jobs to be cut.

In addition, as part of the plan's development and following the recent acquisitions of Signify Health and Oak Street Health, CVS performed a strategic review of its transformation initiatives. As a result of this review, certain initiatives were identified for termination. Consequently, the Company recorded a pre-tax restructuring charge of $496 million during the three months ending on June 30, 2023, to support the restructuring plan.

By StreetInsider.com Staff

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