CVS quarterly profit beats; expects to close Aetna deal this month

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(Reuters) – CVS Health Corp (CVS.N), which expects to close its $ 69 billion purchase of Aetna Inc (AET.N) this month, reported third-quarter profit that beat analysts' estimates on higher sales of prescription drugs.

FILE PHOTO: Shoppers walk outside at CVS store and pharmacy in Medford, Massachusetts, U.S. December 4, 2017. REUTERS / Brian Snyder / File Photo

Shares of the drugstore chain and pharmacy benefit managers (PBM) were up 2.7 percent at $ 75.70 in morning trading.

The company said it would benefit from a reduction in the costs incurred in the second year.

Chief Executive Officer Larry Menlo said on call with analysts.

CVS, which last month won U.S. Department of Justice approval to buy Aetna, said to have reached agreement with the state of California on the acquisition and finalize terms. CVS said, The deal is expected to be close to the Thanksgiving holiday, which falls on Nov. 22.

It together with the one of the largest PBMs and one of the nation's oldest health insurers.

CVS could offer more preventive care services and screenings to patients in its clinics, avoiding higher costs.

Pharmacy same-store sales rose 8.7 percent in the quarter, while analysts were expecting at 7.7 percent rise.

Same-store sales rose 0.8 percent versus analysts' expectations of an 0.8 percent drop, despite brick-and-mortar drugstore chains like CVS coming under increasing pressure from consumer shifts to online options.

Sales of beauty products at CVS stores have benefited from promotions and newer offerings. Last year, the company announced to offer over a hundred new South Korean beauty brands at its stores.

Excluding items, CVS Health said it earned $ 1.73 per share, topping analysts' average estimates by 2 cents.

Net revenue rose 2.4 percent to $ 47.27 billion, beating expectation of $ 47.18 billion.

Net income rose to $ 1.39 billion, or $ 1.36 per share, in the quarter. Its income tax provision declined by $ 268 million. (Bit.ly/2D48hy8)

Reporting by Manas Mishra and Manogna Maddipatla in Bengaluru; Editing by Arun Koyyur and Bill Berkrot

Our Standards:The Thomson Reuters Trust Principles.

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