CVS Health (NYSE: CVS) delivered earnings that beat analyst expectations on Monday, boosted by the strength in its pharmacy services business, which offset weaker sales in its retail business.
Adjusted EPS came in at $1.50 cents vs. of $1.48 expected. Revenue was $46.2 billion vs. $46.17 billion expected.
The drugstore operator is in talks to buy health insurer Aetna (NYSE: AET) for a proposed $200 per share or more, sources familiar with the matter say. The potential deal comes as CVS moves further into health care amid increasing pressure on its traditional retail sales.
CVS reported net revenue of $46.18 billion, up 3.5% from the same quarter last year, and essentially in line with estimates.
In the third quarter, CVS said its net income fell to $1.29 billion, or $1.26 per share, from $1.54 billion, or $1.43 a share, a year earlier.
Excluding items, the company earned $1.50 per share, outpacing Wall Street estimates of $1.48 per share.
The Woonsocket, Rhode Island-based company has been transforming itself into a health-care business for years, propelled by its acquisition of Caremark pharmacy benefit manager platform in 2007.
(A PBM typically is a third party that negotiates prescription drug benefits for a commercial health plan.)
It generated net sales of $32.9 billion for its PBM business for the quarter — roughly 70% of its sales — up 8.1% from the quarter before. Profitability in the division though was hurt by pressure on drug prices.
Shares opened Monday down $1.76, or 2.3%, to $67.69
