As COVID-19 continues to roil its operations, CVS Health beat a fourth-quarter analyst earnings per share estimate as retail segment revenues advanced.
For the 2020 fiscal year, company net income was $7.19 billion, or 5.47 per diluted share, versus $6.63 billion, or $5.08 per diluted share. in the 2019 annum, the company reported. Earnings adjusted for one-time events were $9.86 billion, or $7.50 per share, versus $9.24 billion, or $7.08 per share, in the year earlier.
CVS posted total revenues for the full year of $268.71 billion versus $256.78 billion in fiscal 2019. Operating income was $13.91 billion versus $11.99 billion and adjusted operating income was $16.01 billion versus $15.34 billion in the fiscal year prior.
For the fourth quarter, company net income was $975 million, or 75 cents per diluted share, versus $1.74 billion, or $1.33 per diluted share, in the 2019 period, the company stated. Adjusted earnings were $1.71 billion, or $1.30 per share, versus $2.27 billion, or $1.73 per share, in the year-earlier period.
CVS topped a MarketBeat-published fourth quarter adjusted earnings per share analyst consensus estimate of $1.24.
CVS posted total revenues for the fourth quarter of $69.55 billion versus $66.89 billion in the 2019 period. Operating income was $2.52 billion versus $3.04 billion and adjusted operating income was $2.95 billion versus $3.77 billion in the year-prior quarter.
Retail/LTC segments total revenue for the full year was $91.2 billion versus $86.61 billion in the year before, CVS noted. Operating income was $5.64 billion versus $5.79 billion and adjusted operating income was $6.15 billion versus $6.71 billion in the year previous.
Fourth quarter Retail/LTC segment total revenues were $24.06 billion versus $22.58 billion in the year-before quarter, CVS maintained. Operating income was $1.64 billion versus $1.91 billion while adjusted operating income was $1.78 billion versus $2.03 billion in the year-previous period.
Front-store revenues, including general merchandise, decreased 1.6% for the quarter year over year primarily due to decreased customer traffic and reduced volume in cough and cold product sales largely as a result of the COVID-19 pandemic, CVS indicated. For the full annum, front store revenues increased 1.2% year over year primarily due to increases in consumer health and general merchandise sales.
According to the company, operating income and adjusted operating income in the fourth quarter decreased 16.9% and 21.8%, respectively, compared to the year-past period primarily due to the impact of the COVID-19 pandemic in the Health Care Benefits and Retail/LTC segments, as well as continued reimbursement pressure in the Retail/LTC segment, partially offset by improved purchasing economics in the Pharmacy Services segment and the favorable impact of enterprise-wide cost savings initiatives in 2020. The decrease in operating income also was partially offset by pre-tax income of $307 million associated with the receipt of amounts owed the company under the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 risk corridor program that was previously fully reserved for as payment was uncertain.
Operating income and adjusted operating income for the fiscal year increased 16.1% and 4.4%, respectively, compared to the year past. The increase in both operating income and adjusted operating income was primarily due to the net impact of the COVID-19 pandemic, improved purchasing economics in the Pharmacy Services segment and the favorable impact of enterprise-wide cost savings initiatives in 2020, partially offset by continued reimbursement pressure in the Retail/LTC segment. The impact of the COVID-19 pandemic resulted in increases in both operating income and adjusted operating income in the Health Care Benefits segment, partially offset by declines in the Retail/LTC segment. The increase in operating income also was driven by pre-tax income of $307 million associated with the receipt of amounts owed the company under the ACA risk corridor program, a $269 million pre-tax gain on the sale of the company’s Coventry Health Care Workers’ Compensation business, and the absence of $231 million of store rationalization charges and a $205 million pre-tax loss on the sale of the CVS Brazilian subsidiary, Drogaria Onofre Ltda., the company related.
In announcing the fiscal results, CVS Health president and CEO Karen Lynch said, “The COVID-19 pandemic presented unique challenges to our business and to the entire health care industry. We utilized the full depth and breadth of our capabilities and our presence in local communities across the country, to play a leadership role in COVID-19 testing and vaccine administration. Our ability to deliver 2020 full-year results above expectations is a testament to the strength of our strategy and the flexibility of our diversified health services model.