CVS beats Street with Q3 earnings

Dan Berthiaume
Senior Editor, Technology
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CVS Health Corp. reported its third straight quarter of strong financial results.

The drugstore giant reported third quarter fiscal 2021 total consolidated revenue of $73.79 billion, up 10% from $67.06 billion in the year-earlier period and ahead of Wall Street analysts’ projected $70.49 billion. Net income of $1.59 billion rose 30% from $1.22 billion in the third quarter of fiscal 2020. Net income per share totaled $1.21, up 30% from $0.93

CVS attributed much of its revenue growth to sales lifts produced by its administration of 11.6 million COVID-19 vaccinations and 8.5 million COVID-19 diagnostic tests during the quarter. While the total number of vaccines administered by CVS fell from 17 million during the second quarter of fiscal 2021, the number of diagnostic tests increased from roughly 6 million. As of September 2021, CVS had administered more than 34 million COVID-19 vaccines and more than 32 million tests.

The retailer also cited sales of over-the-counter COVID-19 test kits and increased prescription and front store volume compared to the pandemic-dampened results of a year earlier as aiding its revenue growth.

CVS is preparing for further growth driven by factors such as seasonal flu shots, ongoing demand for COVID-19 vaccines and COVID-19 boosters. The company recently held a one-day national hiring event as it looks to fill 25,000 clinical and retail positions. Most of the open positions are for full-time, part-time and temporary licensed pharmacists, trained pharmacy technicians and nurses at CVS Pharmacy stores.  The company is also looking to hire store associates.

In addition, CVS is preparing for an anticipated difficult flu season with an artificial intelligence (AI)-based, personalized messaging campaign. The drugstore giant is partnering with IBM Watson Advertising to enable chat-style, one-to-one interactions and targeted mobile promotions designed to encourage flu shots. This has included working with the ‘Flu Insights with Watson’ tool on The Weather Channel app, which helped CVS achieve its goal of reaching and engaging customers in high-risk flu areas to drive awareness of flu shot offerings, as well as cough, cold and flu medications. 

The campaign also included a flu sponsorship designed to alert communities of their risk of contracting the flu and provide reminders to prioritize vaccinations and take proactive measures to stay healthy during the flu season.

The company has revised its full-year 2021 diluted EPS guidance range to $6.13 to $6.23 from $6.35 to $6.45, raised its full-year 2021 adjusted EPS guidance range to $7.90 to $8.00 from $7.70 to $7.80, and raised its full-year 2021 cash flow from operations guidance range to $13 billion to $13.5 billion from $12.5 billion to $13 billion.

"We outperformed expectations once again and continue to lead the way in changing how, when and where care is delivered for millions of Americans," said CVS Health president and CEO Karen S. Lynch. "Our services are responsive to evolving consumer needs, from administering millions of COVID-19 tests and vaccines to offering primary care accessible from virtually anywhere, and our touchpoints allow for unmatched impact."