Despite beating analyst expectations of Q4 earnings, CVS Health Corp reportedly left its 2022 earnings forecast unchanged as it anticipates the number of vaccines administered across its drugstores to witness a 70% to 80% decline this year.
CVS reportedly administered COVID-19 vaccine booster doses in Q4 2021 that it had previously expected to provide this year, which translated to a near 13% increase in retail store sales. That was also a factor in not raising the 2022 forecast, it said.
The Aetna health insurer owner, which has one of the largest U.S. drugstore chains, manages pharmacy benefits for employers and health plans, also expects a 40% to 50% fall in COVID-19 testing at its stores and a "modest full-year volume growth" in over-the-counter test kits.
It is worth noting that though some countries like Israel have begun administering fourth vaccine doses, CVS is not considering booster shots to elevate its business.
CFO Shawn Guertin, on this matter, cited that their outlook doesn’t see any effect from the administration of a fourth COVID-19 booster and the revenue from vaccine to be more pronounced only in the first half of the year.
In Q4 2021, CVS stores logged a demand of over 20 million COVID-19 vaccines, up from around 11 million in the preceding quarter as the U.S. booster shot campaign gained traction. The company facilitated over 8 million COVID-19 tests, similar to what it did in Q3.
CVS’s pharmacy services unit, including the pharmacy benefit management business, clocked USD 39.34 billion in the quarter as compared to analyst expectations of USD 36.36 billion. Whereas, total revenue jumped by 10% to USD 78.60 billion, beating estimates of USD 75.65 billion.
Health insurance and pharmacy benefit management units will be the primary revenue sources this year, as per the firm.
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https://www.investing.com/news/economy/cvs-health-profit-rises-34-on-vaccine-test-boost-2760221