CVS Health (NYSE:CVS) shares sprouted wings, after the chain smashed Wall Street’s second-quarter expectations, with its three businesses posting better-than-expected results. The company also raised its full-year forecast on Wednesday.
Prices of brand name medicines rose in the second quarter, boosting CVS’ drugstore and pharmacy benefit manager’s results. Both units make more money when prices are higher. Drug makers, facing political scrutiny, had shown reluctance to hike their prices earlier this year.
CVS’ pharmacy filled 19% more prescriptions this quarter than in the same period last year. Sales in the front of CVS’ drugstores also rose, mostly thanks to an increase of people buying health products like cough medicine.
The company’s newly acquired Aetna health insurance business also beat Wall Street’s revenue expectations, reaching $17.4 billion in the quarter.
CVS is trying to prove to investors that it can integrate Aetna and transform itself into an innovative health-care company.
CVS reported second-quarter net income of $1.93 billion, or $1.49 per share, up from a loss of $2.56 billion, or $2.52 per share a year earlier.
When adjusted, CVS earned $1.89 per share, above the $1.69 per share expected by analysts.
Net sales reached $63.43 billion, up 35% from the year ago-quarter’s $46.92 billion, largely because of the Aetna health insurance business CVS acquired. Analysts had anticipated $62.65 billion.
The company now expects full-year adjusted earnings between $6.89 and $7 per share, up from the previously guided range of $6.75 to $6.90 a share.
CVS began Wednesday trading up $2.85, or 5.3%, to $56.94
