CVS 2021 Forecast Beats Estimate, Retail Sales Show Rise

(Bloomberg) -- CVS Health Corp. forecast a strong year ahead after administering more than 3 million vaccines so far in about 40,000 long-term facilities, a key part of the U.S. campaign to beat the pandemic.

The pharmacy giant said in a statement Tuesday it would have adjusted earnings of between $7.39 and $7.55 per share for 2021, citing rising retail sales. The average estimate of analysts surveyed by Bloomberg was $7.50.

Covid testing contributed about $400 million in revenue during the fourth quarter, according to the company. For the coming year, CVS expects a $400 million to $500 million benefit from Covid-related activities. In the quarter, retail sales rose 7% from a year earlier, while prescriptions filled increased 2%.

CVS’s shares were up 0.7% in early trading in New York. Through Friday’s close, the stock had gained 8.7% this year.

“These are unprecedented times and our purpose to help people on their path to better health has never been more important,” CVS Chief Executive Officer Karen Lynch said Tuesday on a conference call with analysts. “Our strong results in 2020 show that both our strategy and business model are working.”

Giving Covid-19 shots in long-term care facilities had little effect on CVS’s fourth-quarter results, the company said in its earnings presentation. How much vaccine administration contributes to this year’s results will depend on supply, the company said.

CVS started immunizing nursing home workers and residents in mid-December through a partnership with the federal government. It’s now administering shots at its pharmacies in more than a dozen states. The company also said it has administered 15 million coronavirus tests so far.

Revenue rose 4% compared with a year earlier to $69.55 billion, the company said. Adjusted earnings per share for the quarter hit $1.30, also beating estimates.

Revenue for CVS’s health-benefits segment rose 11%. Pharmacy-services sales decreased 2% while operating income slid nearly 17% year-over-year, the company said.

©2021 Bloomberg L.P.