CVS Posts Major Loss Despite Strong Q3 Earnings and Revenue Boost

Takoma Park, Maryland — CVS Health reported on Wednesday its third-quarter earnings and revenue exceeded estimates, but shares fell over 3% in premarket trading due to a significant net loss.

The net loss for the quarter reached $3.99 billion, or $3.13 per share, reflecting a $5.7 billion goodwill impairment charge linked to its health care delivery segment. Last year, CVS had net income of $71 million, or 7 cents per share.

David Joyner, CVS’s new CEO, described the performance as a promising turnaround after a challenging period under former executive Karen Lynch. Joyner remarked, “I couldn’t be more happy about the fact that this is three quarters where we’ve had a beat and raise,” projecting a favorable close for 2025.

CVS has revised its fiscal 2025 adjusted earnings outlook to between $6.55 and $6.65 per share, higher than the prior range of $6.30 to $6.40. The company attributed part of its positive outlook to the recovery of its insurance subsidiary, Aetna, as patients resume delayed medical procedures.

Aetna and other insurers have faced rising medical costs recently, but signs suggest they are becoming better equipped to manage these challenges. Joyner noted a “really good sales season” for CVS’s pharmacy benefit manager, Caremark.

During the quarter, CVS generated sales of $102.87 billion, up 7.8% compared to the same quarter last year. The company’s three business segments all surpassed Wall Street’s revenue expectations.

The insurance segment alone brought in $35.99 billion in revenue, which was more than 9% higher than a year ago. Analysts had forecasted $34.48 billion for the quarter. This growth was driven by an increase in the government business, aided by provisions of the Inflation Reduction Act affecting Medicare Part D.

CVS’s health services division saw revenues of $49.27 billion, significantly exceeding estimates of $45.71 billion.

Despite these gains, Joyner acknowledged the challenges ahead. “We made the decision this quarter to both slow clinic growth and also close some underperforming clinics,” he stated, hinting at upcoming reductions. “We will close 16 locations of primary care provider Oak Street Health, but this does not change our views of value-based care.”