AP – CVS Health hiked its 2021 forecast and beat Wall Street’s first-quarter expectations as a growing insurance business offset hits the health care giant took from a weak cold and flu season.
The company covered more people through Medicaid and Medicare Advantage, and adjusted operating earnings from health insurance jumped nearly 20 per cent in the first quarter to USD1.78 billion.
CVS Health said on Tuesday that it also delivered more than 23 million COVID-19 tests and 17 million vaccine doses through April, which helped its drugstore business.
But the pandemic has disrupted business at CVS as well. A weak cough, cold and flu season brought on in part by mask wearing and social distancing hurt sales in both the company’s drugstore business and its pharmacy benefits management operations, which run drug plans for big clients like insurers and employers.
CVS Health drugstores also faced a tough sales comparison to last year’s first quarter, when customers stocked up on pharmacy supplies as the pandemic set in.
Sales from the front end, or the area outside the pharmacy, of established drugstores fell more than 11 per cent compared to the first quarter of 2021.
Products that help customers deal with colds and the flu are usually a big factor behind first-quarter sales, said Managing Director of GlobalData Neil Saunders.
“While CVS has drawn in customers on the testing and vaccination side, there is little evidence to suggest that this is spilling over into the general retail part of its business,” Saunders said in an email.