🔒CVS Health posts strong 2Q earnings, in part due to Aetna improvement

CVS Health Corp. released its second-quarter earnings report on Thursday, beating Wall Street analyst expectations and once again raising its full-year forecast. The Woonsocket, Rhode Island-based company attributed the strong results in part to a strong quarter by its health benefits unit, Hartford-based Aetna. CVS also reiterated its announcement in May that its CVS Pharmacy unit has agreed to acquire the prescription files of about 1,000 Rite Aid pharmacies, as well as some of its stores in three states. CVS Pharmacy said it has agreed to acquire the prescription files of certain Rite Aid pharmacies across 15 states in areas that CVS serves. It also will acquire and operate certain Rite Aid stores in Idaho, Oregon and Washington. The closings for the store acquisitions are already underway, though each “remains subject to the satisfaction of customary closing conditions,” CVS said. Rite Aid filed for Chapter 11 bankruptcy protection for the second time earlier this year, and recently announced it would close another 114 stores across 12 states, including 42 in Pennsylvania and two in Connecticut. CVS Pharmacy said it is “well-positioned to serve its existing customers and patients, as well as those who may be transitioning from Rite Aid.” CVS Health reported net income of $1.01 billion, or adjusted earnings of $1.81 per share for the second quarter, on revenue of $98.9 billion. Both figures beat analysts expectations. Revenue for all three of its business units, including Hartford-based insurer Aetna, also beat analyst expectations. With the strong report, CVS Health adjusted its 2025 earnings to range upward to between $6.30 and $6.40 per share. “Our strong performance demonstrates the continued focus we have on operational and financial improvement across our businesses, led by a significant and durable recovery at Aetna, strong retention at CVS Caremark and growth and momentum at CVS Pharmacy,” said David Joyner, CVS Health president and CEO. Aetna remains under significant pressure, however, as it and other health insurers struggle with rising costs due, in part, to more Medicare Advantage patients having medical procedures they delayed during the COVID-19 pandemic. Aetna’s medical benefit ratio (MBR), which measures total medical expenses paid compared to premiums collected, increased to 89.9% in the quarter from 89.6% a year earlier. In general, a lower ratio means an insurer received more in premiums than it paid out in benefits. Following the report, CVS Health’s stock rose more than 5% on the New York Stock Exchange.