Lowers And Narrows 2016 Guidance, Provides 2017 Preliminary Outlook And Announces New Long-Term Adjusted EPS Target
CVS Health Corporation today announced operating results for the three months ended September 30, 2016.
President and Chief Executive Officer Larry Merlo stated, “We posted a solid third quarter with the PBM exceeding our expectations and retail performing at the lower end of our expectations. However, very recent pharmacy network changes in the marketplace are expected to cause some retail prescriptions to begin migrating out of our pharmacies this quarter. In addition, we are currently experiencing slowing prescription growth in the overall market as well as a soft seasonal business. These factors combined are leading us to reduce the mid-point of our guidance for this year by five cents per share. The network changes have more significant implications for our 2017 outlook. While we expect a healthy increase in PBM operating profit growth in 2017, we expect a decrease in retail operating profit growth.”
Mr. Merlo continued, “We remain confident in our model and we are targeting 10% growth in Adjusted EPS for the longer term, as we continue to introduce new and innovative ways to drive value for patients, payors, and providers.”
Third Quarter Year-over-year Highlights:
- Net revenues increased 15.5% to $44.6 billion
- GAAP operating profit increased 20.9% to $2.8 billion
- GAAP diluted EPS from continuing operations of $1.43
- Adjusted EPS increased 28.0% to $1.64
- GAAP and Adjusted EPS both include a benefit of approximately 5 cents per share related to a lower income tax rate primarily due to the resolution of tax matters previously forecasted for the fourth quarter
- Cash flow from operations of $7.9 billion
- Generated free cash flow of $6.6 billion
Find the third quarter summary in its entirety here.