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CVS Posts Q2 Loss On Charges

In a second quarter hit by one-time unique charges, CVS Health recorded a company net loss of $2.56 billion, or $2.52 per diluted share, versus company net income of $1.1 billion, or $1.07 per diluted share, in the year-before period.

Adjusted income from continuing operations, excluding unique items, was $1.72 billion, or $1.69 per diluted share, versus $1.36 billion, or $1.33 per diluted share, in the year-previous period. CVS topped a MarketBeat-published analyst consensus estimate of $1.61.

Unique items included a goodwill impairment charge of $3.9 billion associated with the CVS long-term care business as well as $39 million in transaction and integration costs related to the proposed acquisition of Aetna, CVS pointed out.

Net revenues in the quarter were $46.71 billion versus $45.69 billion in the year-prior period. Operating loss was $1.59 billion as compared to an operating profit of $2.12 billion in the year-earlier quarter. Adjusted operating profit was $2.37 billion versus $2.27 billion in the quarter a year before.

Revenues in the retail/LTC segment increased 5.7% to $20.67 billion. Segment comparable store sales gained 5.9%, but front store comps, including home and other general merchandise, slipped 1%. The decline in front store comps resulted from a negative 90 basis point effect associated with an Easter holiday shift from the 2017 second quarter to the 2018 first quarter, as well as softer customer traffic, partially offset by an increase in basket size.

Larry Merlo, CVS president and CEO, said, “Our solid performance both in the quarter and year-to-date demonstrates our ability to drive value. It also builds upon a strong foundation for a seamless integration of CVS and Aetna with one goal: to transform the consumer health care experience and, by doing so, deliver long-term profitable growth for shareholders.”