Shares of CVS Health (NYSE: CVS) was 6.2% higher at 3:50 p.m. EST on Friday. These gains came after the healthcare company reported better-than-expected third-quarter results before the market opened.
CVS announced Q3 revenue reached 67.1 billion, up 3.5% over the same period last year. That topped Wall Street’s consensus revenue estimate of $ 66.7 billion. The company reported adjusted earnings per share of $ 1.66, beating analysts’ average estimate of $ 1.33.
While CVS Health’s pharmaceutical services revenue declined slightly YoY, its retail / long-term care and healthcare segments more than offset the decline. The company attributed the higher sales in part to increased prescription volumes, increased diagnostic testing, and membership growth for the Aetna Medicare and Medicaid programs.
Investors should not focus too much on a quarter. However, CVS Health’s fortunes appear to be improving, with the company strengthening its 2020 revenue and profit guidelines.
So what now
The main question mark for healthcare stocks is how the ongoing COVID-19 pandemic might affect their business. So far, however, CVS Health has navigated the coronavirus crisis quite well. The company will soon have a new CEO at the helm. CVS announced that Larry Merlo intends to retire. Karen Lynch, who currently leads Aetna, will take over as CEO on February 1, 2021.