CVS Health Corp. on Wednesday lifted its full-year adjusted earnings forecast after robust demand for COVID-19 vaccinations and tests helped the U.S. healthcare conglomerate beat analysts’ estimates for third-quarter profit.
Rival Walgreens Boots Alliance also signaled a boost from higher demand for vaccinations following the spread of the Delta variant.
CVS said it had administered more than 8 million COVID-19 tests and more than 11 million COVID-19 vaccines in the third quarter.
The company had in August cut its 2021 expectations for the number of COVID-19 vaccine doses it would administer at its clinics to a range of 32 million to 36 million, from its prior view of 29 million to 44 million doses, reflecting a slowdown in vaccinations during the second quarter.
CVS, best known for its large chain of drugstores across the United States, also operates a health insurance business, and a pharmacy benefits management unit, which helps negotiate lower drug prices for its customers such as employers and health insurers.
Sales in its health insurance unit rose 9.5 percent to $20.48 billion, while medical benefit ratio (MBR), the percentage of premiums paid for medical services, rose to 85.8 percent from 84 percent last year, due to higher COVID-19 related costs.
Health insurers’ medical costs have been in flux since the beginning of the pandemic. Lower medical claims for non-urgent procedures helped control costs, but COVID-19 vaccinations and care pushed them higher.
Revenue at its pharmacy benefit management unit rose 9.3 percent to $39.05 billion.
Excluding items, the company earned $1.97 per share, above estimates of $1.78, according to IBES data from Refinitiv.
CVS now expects full-year adjusted earnings per share of $7.90 to $8.00, from $7.70 to $7.80 previously.