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• CVS raised its full-year 2021 earnings to be in a range of $5.87 to $5.92 per share
• Shares of the company were up about 1% on Tuesday at $107.26
CVS Health on Tuesday raised its full-year earnings outlook for 2021 as more customers buy Covid tests and other healthcare services.
CVS raised its full-year 2021 earnings to be in a range of $5.87 to $5.92 per share, an increase from previous expectations of $5.50 to $5.61 per share.
Chief Financial Officer Shawn Guertin said that in the fourth quarter, retail sales were stronger than expected. Vaccination rates were also high in November and December, he said.
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Guertin added that the over-the-counter Covid test kits also increased in December. About 80% of CVS’s outperformance is due to retail sales, especially Covid vaccines.
Insurance business
With lower levels of hospitalizations in Omicron-related cases, the costs for CVS’ health insurance business, Aetna, are also lower compared to the Delta variant.
Guertin said that later this week, Aetna will be required to cover the cost of at-home Covid tests for people using its plans.
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This could result in higher sales of healthcare-related items or increased costs due to insurance reimbursements.
CVS also said the company would provide more guidance as its 2022 forecast will be between $7.04 and $7.24 earnings per share, and between $8.10 and $8.30 per share, after adjustments.
Shares of the company were up about 1% on Tuesday at $107.26.
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