CVS raises full-year forecast, takes $5.7 billion impairment charge on health clinics
By Amina Niasse
NEW YORK (Reuters) -CVS Health raised its annual adjusted profit forecast on Wednesday, aided by improved pharmacy revenues, but also announced a $5.73 billion writedown of healthcare businesses including its in-pharmacy MinuteClinics.
The company, which operates one of the largest U.S. pharmacy chains, Aetna insurance and the CVS Caremark pharmacy benefit manager, reported a net loss of $3.13 per share for the third quarter.
The $5.73 billion writedown also reflects a restructuring of Oak Street Health, a primary care provider, and diminished value of Signify Health that offers home-based services.
Both businesses focus on Medicare, the U.S. government program for older adults and people with disabilities.
Like others in the industry, including those run by UnitedHealth Group, these Medicare businesses have been pressured by higher medical services spending and changes in government reimbursement.
The company raised its forecast for adjusted full-year earnings growth, a move CEO David Joyner said reflected new customers acquired from its purchase of the now-shuttered chain drugstore Rite Aid, and in its Caremark pharmacy benefit business.
Joyner said in an interview with Reuters that the company was conservatively managing its risks around its health insurance and healthcare delivery units.
"We are taking a cautious and prudent look in terms of where healthcare trends have been and where we expect them to continue to be elevated as we head into 2026," he said.
Separately, CVS took an $83 million charge to cover the closure of 16 Oak Street clinics and said it planned to "reduce the number of new primary care clinics it would open in 2026 and thereafter".
"Our thesis for that business (was) that we were going to grow, and then we were going to be driving the patient growth inside the business," Joyner said. "The markets changed."
BOOKING ANOTHER QUARTERLY BEAT
The earnings performance makes it the fourth consecutive quarter of CVS beating earnings estimates, solidifying a turnaround it promised last year after repeatedly falling short of expectations weighed by medical costs in its insurance business.
CVS reported an adjusted quarterly profit of $1.60 per share, above analysts' average estimate of $1.37 per share, according to data compiled by LSEG.
For full-year 2025, the healthcare conglomerate raised its adjusted profit outlook to between $6.55 and $6.65 per share, from $6.30 to $6.40 per share forecast previously.
Analysts were expecting annual adjusted profit of $6.38 per share.
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