CVS Health swung back to a profit in the second quarter and raised its 2019 forecast beyond Wall Street expectations thanks partly to an influx of revenue from its recently acquired health insurance business.
Shares of the drugstore chain and pharmacy benefit manager jumped early Wednesday after it detailed a better-than-expected quarterly performance.
Total revenue climbed more than 35 percent to top $63.43 billion in the quarter, while the company brought in $1.93 billion in net income after booking a loss in last year’s quarter due to a big charge from its long-term care business.
CVS Health Corp., based in Woonsocket, Rhode Island, runs more about 9,900 retail locations and processes over a billion prescriptions annually as a pharmacy benefit manager. Last November, the company added health insurance when it largely completed the roughly $69-billion Aetna acquisition. A federal judge is still reviewing the company’s sale of its Medicare prescription drug business, which was done to resolve anti-monopoly concerns.
CVS cited the Aetna deal as a key factor in both its top and bottom line growth during the second quarter.
Earnings, adjusted for one-time items, were $1.89 per share, which was 19 cents better than expected, according to a survey by Zacks Investment Research. Analysts also expected, on average, revenue of $62.61 billion.
CVS Health said it now expects 2019 adjusted earnings to range between $6.89 and $7.00 per share after reaffirming in June its previous forecast for earnings of $6.75 to $6.90 per share.
For the full year, Wall Street expects earnings of $6.84 per share.
Company shares jumped more than 5 percent, or $3.05, to $57.13 before markets opened Wednesday.
The stock price had fallen 17 percent so far this year as of Tuesday. Shares still hadn’t recovered from a dip they took in February after the company set initial expectations for 2019 below Wall Street forecasts.