Financial Highlights
CEO Commentary
“Our integrated model accelerates our ability to uniquely do what is most important to today’s health care consumers: deliver lower cost of care, a simpler experience and better outcomes. Our third quarter results reflect strong performance in the Health Services and Pharmacy & Consumer Wellness segments, and also highlight the continued need to work across our enterprise and address macro challenges to the Health Care Benefits segment. My commitment to our CVS Health colleagues and our customers is to drive focused execution of our integrated strategy to improve the health of the 185 million people we are privileged to serve.”
— David Joyner, CVS Health President and CEO
WOONSOCKET, R.I., Nov. 6, 2024 /PRNewswire/ — CVS Health Corporation (NYSE: CVS) today announced operating results for the three months ended September 30, 2024.
Financial Results Summary
Three Months Ended
September 30,
In millions, except per share amounts
2024
2023
Change
Total revenues
$ 95,428
$ 89,764
$ 5,664
Operating income
832
3,690
(2,858)
Adjusted operating income (1)
2,547
4,456
(1,909)
Diluted earnings per share
$ 0.07
$ 1.75
$ (1.68)
Adjusted EPS (2)
$ 1.09
$ 2.21
$ (1.12)
Third quarter GAAP diluted EPS of $0.07 decreased from $1.75 in the prior year and Adjusted EPS of $1.09 decreased from $2.21 in the prior year, primarily due to a decline in the Health Care Benefits segment’s operating results, which reflect continued utilization pressure and premium deficiency reserves of approximately $1.1 billion recorded in the third quarter of 2024, related to anticipated losses in the fourth quarter of 2024 within the Medicare and individual exchange product lines. The premium deficiency reserves are expected to be substantially released during the fourth quarter of 2024, benefiting results in that period.
The Company presents both GAAP and non-GAAP financial measures in this press release to assist in the comparison of the Company’s past financial performance with its current financial performance. See “Non-GAAP Financial Information” beginning on page 11 and endnotes beginning on page 22 for explanations of non-GAAP financial measures presented in this press release. See pages 13 through 15 for reconciliations of each non-GAAP financial measure used in this release to the most directly comparable GAAP financial measure.
Consolidated third quarter results
Three Months Ended
September 30,
Nine Months Ended
September 30,
In millions, except per share amounts
2024
2023
Change
2024
2023
Change
Total revenues
$ 95,428
$ 89,764
$ 5,664
$ 275,099
$ 263,963
$ 11,136
Operating income
832
3,690
(2,858)
6,148
10,370
(4,222)
Adjusted operating income (1)
2,547
4,456
(1,909)
9,248
13,307
(4,059)
Net income
71
2,265
(2,194)
2,963
6,321
(3,358)
Diluted earnings per share
$ 0.07
$ 1.75
$ (1.68)
$ 2.35
$ 4.88
$ (2.53)
Adjusted EPS (2)
$ 1.09
$ 2.21
$ (1.12)
$ 4.23
$ 6.62
$ (2.39)
For the three months ended September 30, 2024 compared to the prior year:
Restructuring program
Health Care Benefits segment
The Health Care Benefits segment offers a full range of insured and self-insured (“ASC”) medical, pharmacy, dental and behavioral health products and services. The segment results for the three and nine months ended September 30, 2024 and 2023 were as follows:
Three Months Ended
September 30,
Nine Months Ended
September 30,
In millions, except percentages
2024
2023
Change
2024
2023
Change
Total revenues
$ 32,996
$ 26,296
$ 6,700
$ 97,707
$ 78,920
$ 18,787
Adjusted operating income (loss) (1)
(924)
1,536
(2,460)
746
4,901
(4,155)
Medical benefit ratio (“MBR”) (3)
95.2 %
85.7 %
9.5 %
91.7 %
85.5 %
6.2 %
Medical membership (4)
27.1
25.7
1.4
See the supplemental information on page 17 for additional information regarding the performance of the Health Care Benefits segment.
Health Services segment
The Health Services segment provides a full range of pharmacy benefit management solutions, delivers health care services in its medical clinics, virtually, and in the home, and offers provider enablement solutions. The segment results for the three and nine months ended September 30, 2024 and 2023 were as follows:
Three Months Ended
September 30,
Nine Months Ended
September 30,
In millions
2024
2023
Change
2024
2023
Change
Total revenues
$ 44,129
$ 46,891
$ (2,762)
$ 126,585
$ 137,697
$ (11,112)
Adjusted operating income (1)
2,204
1,878
326
5,482
5,452
30
Pharmacy claims processed (5) (6)
484.1
579.6
(95.5)
1,418.2
1,743.5
(325.3)
See the supplemental information on page 18 for additional information regarding the performance of the Health Services segment.
Pharmacy & Consumer Wellness segment
The Pharmacy & Consumer Wellness segment dispenses prescriptions in its retail pharmacies and through its infusion operations, provides ancillary pharmacy services including pharmacy patient care programs, diagnostic testing and vaccination administration, and sells a wide assortment of health and wellness products and general merchandise. The segment also provides pharmacy services to long-term care facilities and pharmacy fulfillment services to support the Health Services segment’s specialty and mail order pharmacy offerings. The segment results for the three and nine months ended September 30, 2024 and 2023 were as follows:
Three Months Ended
September 30,
Nine Months Ended
September 30,
In millions
2024
2023
Change
2024
2023
Change
Total revenues
$ 32,423
$ 28,872
$ 3,551
$ 90,986
$ 85,578
$ 5,408
Adjusted operating income (1)
1,596
1,389
207
4,016
3,936
80
Prescriptions filled (5) (6)
431.6
407.1
24.5
1,269.6
1,217.6
52.0
See the supplemental information on page 19 for additional information regarding the performance of the Pharmacy & Consumer Wellness segment.
Teleconference and webcast
The Company will be holding a conference call today for investors at 8:00 a.m. (Eastern Time) to discuss its third quarter results. An audio webcast of the call will be broadcast simultaneously for all interested parties through the Investor Relations section of the CVS Health website at http://investors.cvshealth.com. This webcast will be archived and available on the website for a one-year period following the conference call.
About CVS Health
CVS Health is the leading health solutions company, delivering care like no one else can. We reach more people and improve the health of communities across America through our local presence, digital channels and over 300,000 dedicated colleagues – including more than 40,000 physicians, pharmacists, nurses and nurse practitioners. Wherever and whenever people need us, we help them with their health – whether that’s managing chronic diseases, staying compliant with their medications or accessing affordable health and wellness services in the most convenient ways. We help people navigate the health care system – and their personal health care – by improving access, lowering costs and being a trusted partner for every meaningful moment of health. And we do it all with heart, each and every day. Follow @CVSHealth on social media.
Cautionary statement concerning forward-looking statements
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of CVS Health Corporation. Statements in this press release that are forward-looking include, but are not limited to, the information under the headings “CEO Commentary” and “Financial Results Summary” and the information included in the reconciliations and endnotes. By their nature, all forward-looking statements are not guarantees of future performance or results and are subject to risks and uncertainties that are difficult to predict and/or quantify. Actual results may differ materially from those contemplated by the forward-looking statements due to the risks and uncertainties described in our Securities and Exchange Commission (“SEC”) filings, including those set forth in the Risk Factors section and under the heading “Cautionary Statement Concerning Forward-Looking Statements” in our most recently filed Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2024, June 30, 2024 and September 30, 2024 and our Current Reports on Form 8-K.
You are cautioned not to place undue reliance on CVS Health’s forward-looking statements. CVS Health’s forward-looking statements are and will be based upon management’s then-current views and assumptions regarding future events and operating performance, and are applicable only as of the dates of such statements. CVS Health does not assume any duty to update or revise forward-looking statements, whether as a result of new information, future events, uncertainties or otherwise.
– Tables Follow –
CVS HEALTH CORPORATION
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
In millions, except per share amounts
2024
2023
2024
2023
Revenues:
Products
$ 59,674
$ 61,298
$ 169,610
$ 179,984
Premiums
30,925
24,657
91,983
74,117
Services
4,279
3,532
12,108
8,977
Net investment income
550
277
1,398
885
Total revenues
95,428
89,764
275,099
263,963
Operating costs:
Cost of products sold
52,948
54,688
151,019
159,679
Health care costs
29,922
21,499
85,578
63,729
Operating expenses
10,557
9,876
31,185
29,329
Restructuring charges
1,169
11
1,169
507
Loss on assets held for sale
—
—
—
349
Total operating costs
94,596
86,074
268,951
253,593
Operating income
832
3,690
6,148
10,370
Interest expense
752
693
2,200
1,968
Other income
(25)
(22)
(74)
(66)
Income before income tax provision
105
3,019
4,022
8,468
Income tax provision
34
754
1,059
2,147
Net income
71
2,265
2,963
6,321
Net (income) loss attributable to noncontrolling interests
16
(4)
7
(23)
Net income attributable to CVS Health
$ 87
$ 2,261
$ 2,970
$ 6,298
Net income per share attributable to CVS Health:
Basic
$ 0.07
$ 1.76
$ 2.36
$ 4.90
