CVS posts strong earnings for quarter, year

Journal Inquirer (Manchester, CT)

Feb. 16—CVS Health, the parent company of Aetna, posted stronger-than-expected earnings for the fourth quarter and all of 2020, with revenues and earnings mainly holding steady or trending upwards despite the economic havoc unleashed by the coronavirus pandemic.

In a statement released this morning, the Woonsocket, Rhode Island-based health care conglomerate reported fourth-quarter income of $975 million, or $1.30 per share, down from $1.74 billion, or $1.73 per share, during the corresponding period one year prior. On a year-to-year basis, earnings rose from $6.63 billion, or $7.08 per share, in 2019 to $7.19 billion, or $7.50 per share, in 2020.

CVS EARNINGS

Q4: $975 million, down from $1.74 billion one year prior

FULL-YEAR: $7.19 billion, up from $6.63 billion for all of 2019

GAIN DRIVERS: Increasing membership in CVS-marketed health plans; Affordable Care Act reimbursements; sales of standalone Medicare Part D and workers compensation businesses; mass cancelation of elective surgeries

LOSS DRIVERS: Decreased retail sales; continued reimbursement pressure in retail and long-term care segments; early extinguishment of debt

Total revenues grew from $66.88 billion to $69.55 billion quarter-to-quarter and from $256.77 billion to $268.7 billion year-to-year.

Company officials attributed those improvements to increasing membership in CVS-marketed health plans, Affordable Care Act reimbursements, the divestitures of Aetna's standalone Medicare Part D and workers compensation businesses, and the COVID-19-inspired mass cancellation of elective surgeries early last year, which reduced Aetna's benefit costs.

CVS also escaped a number of 2019 liabilities, including $231 million in store rationalization charges and a $205 million pre-tax loss on the sale of Brazilian pharmacy chain Drogaria Onofre, which had put a substantial dent in that year's results.

In a message to investors, the firm listed off its major pandemic response measures, including the recent hiring of over 15,000 clinicians and pharmacy technicians to aid in the distribution of COVID-19 vaccines.

By its own estimates, CVS has performed approximately 15 million COVID-19 tests nationwide and administered more than 3 million coronavirus vaccines in over 40,000 long-term care facilities.

CVS and rival Walgreens were contracted by the Trump administration late last year to help vaccinate residents in long-term care settings, one of the country's highest-priority populations. Both pharmacies have faced criticism in states such as Illinois, Kentucky, Mississippi, and Pennsylvania, where government health officials have openly complained about the slow pace of inoculations at nursing homes and assisted living facilities.

A CVS spokesman said the company is on pace with its vaccine delivery schedule and noted that CVS teams must make contact with patients where they are, in some cases going through facilities room by room — much different than the drive-up vaccination model many Americans are now used to.

Zach cover all topics that fall under business. His coverage can include openings and closings of local businesses, trends in unemployment, details of developments from major companies and utilities, and investigating the impact of state politics and regulations on the private sector. For more updates about business in north-central Connecticut, follow Zach on Twitter: @ZachVasileJI.

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