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In First Quarter of Combined Operations with Aetna, CVS Revenues Jump 35%

By Jack O'Brien  
   May 01, 2019

CVS Health's still-pending acquisition of Aetna delivered exceptional financials for the company in Q1.

One quarter after suffering a net loss of $421 million, CVS Health rebounded with a net income totalling $1.4 billion, according to its first earnings report released since the company combined operations with Aetna.

Total revenues for CVS amounted to $61.6 billion, a nearly $16 billion increase year-over-year, while earnings per share (EPS) and adjusted EPS both grew by at least $0.11 over the same period of time.

CVS Health's $70 billion acquisition of Aetna, which closed last November, is still subject to an ongoing review by U.S. District Judge Richard Leon in Washington, D.C. who is deciding whether to hear from seven witnesses against the megamerger at a hearing later this month.

Related: CVS to Judge: Please Don't Let Those 7 Witnesses Testify

Related: Meet the Judge Who is Tormenting the Justice Department Over the CVS-Aetna Merger

Meanwhile, the Woonsocket, Rhode Island-based company released a statement accompanying its Q1 earnings report Wednesday morning that affirmed confidence in its business strategy going forward.


"We generated strong first quarter results, providing positive momentum to start the year," Larry Merlo, CEO of CVS Health, said in a statement. "Following the close of our Aetna acquisition in late November, our first full quarter of combined operations was a success in many ways. In the quarter we continued to advance our integration efforts while beginning to launch new innovations such as our HealthHUB® concept stores. With our differentiated collection of health care assets we are uniquely positioned to lead the transformation of the U.S. health care system. We remain relentlessly focused on creating value for clients and customers while driving both near and longer-term returns for our shareholders."  

CVS Health's operating income made a comeback in Q1 as well, registering at $2.7 billion, up nearly $700 million year-over-year. This was a change of pace after the company's operating income fell to $824 million in Q4 2018.

After lowering its 2019 EPS guidance last quarter to a range between $4.88 to $5.08, CVS Health updated its guidance to a range between $4.90 to $5.05.

The company did raise its adjusted EPS guidance for 2019 to a range of $6.75 to $6.90, up from a range between $6.68 to $6.88.

Related: Aetna Merger Contributes to $421M Net Loss for CVS

Cash took a hit for CVS Health in Q1, as cash, cash equivalents, and restricted cash at the end of Q1 totalled $6.1 billion, down from more than $42 billion this time last year.

CVS' net cash provided by operating activities totalled $1.9 billion in Q1, down from $2.3 billion in Q1 2018, and net cash provided by financing activities fell from $38 billion to $816 million. 

CVS' Health Care Benefits segment, which accounts for the former Aetna Health Care segment, recorded $17.8 billion in revenues, $1.2 billion in operating income, and membership of 22.8 million, all dramatic improvements compared to this time last year as well as Q4 2018, when the merger closed.

However, Aetna also made news recently as it reached an out-of-court settlement following a deposition made by the company's former medical director that he did not examine a patient's records before denying coverage.

Related: Aetna Quietly Settles High-Profile Lawsuit Over Denied Coverage

Total prescription volume on a 30-day basis grew 5.5% during Q1, driven primarily by "continued adoption of patient care programs," as well as work alongside PBMs and preferred status for CVS in several Medicare Part D networks. 

"CVS' results for the first quarter were above expectations, driven by a 5.5% increase in prescription volume and brand name drug price inflation in both Pharmacy Services and Retail/LTC segments," Mickey Chadha, vice president at Moody's, said in a statement to HealthLeaders. :As expected, the increase was partially offset by continued price compression in the Pharmacy Services segment, reimbursement pressure in the Retail/LTC segment and an increased generic dispensing rate." 


  • Following CVS' earnings call, stock shot up by more than 4% during early morning trading. 
  • Pharmacy revenues in Q1 were $33.5 billion, up from $32.5 billion in Q1 2018.
  • CVS' enterprise prescriptions totalled $679.8 million, a $20.7 million increase year-over-year.

For complete financial information, review CVS Health's filing with the Securities and Exchange Commission.

Editor's note: This story has been updated to include a comment from Moody's.

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.

Photo credit: Photo credit: San Carlos, CA - Aug. 19, 2016. CVS Pharmacy. Originally named Consumer Value Store, CVS Pharmacy is now a subsidiary of the American retail and health care company CVS Health. (Editorial credit: jejim /


CVS health notched a net income of $1.4 billion, an improvement of its $421 million loss in Q4 2018.

The company updated its EPS guidance to a range between $4.90 to $5.05.

CEO Larry Merlo said Q1 was a "success in many ways" for CVS after integrating operations with Aetna.

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