Forward looking, CVS raised its diluted EPS guidance to a range of $5.59 to $5.72.
CVS Health's total revenues topped $65 billion in Q2 2020, representing a 3% year-over-year increase, and the company has raised its year-end guidance amid the ongoing coronavirus disease 2019 (COVID-19) pandemic.
The company, based in Woonsocket, Rhode Island, released its latest earnings report Wednesday morning, highlighted by an operating income of $4.7 billion, up 40.5% year-over-year, an adjusted operating income of $5.3 billion, up 32.2% over the same period, and a net income just shy of $3 billion.
Both CVS' diluted earnings per share (EPS) and adjusted EPS rose at least $0.75 year-over-year and its enterprise prescriptions increased by 4.8 million.
Forward looking, CVS raised its diluted EPS guidance to a range of $5.59 to $5.72, its adjusted EPS to a range of $7.14 to $7.27, and its cash flow from operations to a range of $11 billion to $11.5 billion.
"We’re a health innovation company that is built to meet the evolving needs of the millions we serve every day. That’s been made clear as we continue to navigate the health, social and economic impacts of COVID-19. Our earnings in this environment demonstrate the strength of our strategy and the power of our diversified business model," Larry Merlo, CEO of CVS, said in a statement. "We have a strong foundation of clinical expertise, data analytics and digital capabilities, and unmatched consumer and community reach which has allowed us to rapidly bring our strategy to life at an unprecedented time. The environment surrounding COVID-19 is accelerating our transformation, giving us new opportunities to demonstrate the power of our integrated offerings and the ability to deliver care to consumers in the community, in the home and in the palm of their hand which has never been more important. We have stayed true to our purpose of helping people on their path to better health, and we remain focused on creating value for all our stakeholders."
By segment, CVS' pharmacy services division continued to lead the way with total quarterly revenues of $34.88 billion, though this was only up $47 million year-over-year. The segment also saw total pharmacy claims processed increase 16.4 million, topping 500 million overall.
CVS' retail/LTC segment saw total revenues increase slightly to $21.6 billion, but also experienced a drop in operating income, adjusted operating income, and prescriptions filled.
Finally, the healthcare benefits segment's total revenues increased by over $1 billion year-over-year, while its operating and adjusted operating incomes both rose over $2 billion during the quarter. However, the segment also experienced a medical benefit ratio decline of 13.7%.
CVS has been at the center of several important developments throughout the quarter and the last few weeks.
In mid-July, CVS announced that it would require customers to wear masks in its retail locations in response to the recent surge in COVID-19 cases.
In late May, a half dozen Blue Cross Blue Shield insurers sued CVS, alleging drug pricing fraud.
For complete financial information, review CVS Health's filing with the Securities and Exchange Commission.
Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.
Photo credit: Northbrook - Circa June 2019: CVS Health location. CVS Health is a retail pharmacy and pharmacy benefit manager III / Editorial credit: Jonathan Weiss / Shutterstock.com