CVS Health tallied more than $2 billion in quarterly profits thanks to new health plan members “across all product lines” and customers continued to rely on its stores for Covid-19 tests and vaccinations in the pandemic.
CVS on Wednesday reported net income of $2.3 billion or $1.74 a share compared to $973 million, or 74 cents, in the year-ago quarter. CVS sales jumped 11% to $76.8 billion in the company’s first quarter.
The increase in revenue got a boost from health plan membership, which increased by 674,000 to 24.5 million as of March 31, “reflecting increases across all product lines,” the company said in its first quarter earnings report. CVS owns Aetna, the nation’s third-largest health insurer, and part of the company’s strategy is to encourage health plan members to use the drugstore chain’s growing number of primary care services at its MinuteClinics and HealthHUBs.
The new membership saw a particular boost from the hotly competitive Medicare Advantage business, which surged past 3.1 million members in the quarter from 2.87 million in the year-ago period.
CVS Health’s profits contributed to the company’s decision to raise its financial outlook for the rest of 2022 with adjusted earnings per share now expected to be in the range of $8.20 to $8.40 compared to an earlier forecast of $8.10 to $8.30.
“Our strategy improves access to affordable, convenient and personalized health care, which benefits consumers and shareholders,” CVS Health chief executive Karen Lynch said in a statement accompanying the earnings report. “We once again showed the power of our purpose and potential, building on our strong momentum and raising full-year guidance as a result.”
CVS is still seeing a rush of customers being vaccinated against Covid-19 or tested for the virus as the pandemic drags on in the U.S. CVS said it administered more than eight million vaccinations and 6 million tests in the first quarter. Though the number of vaccines and tests were lower than previous quarters, that still helped boost revenue in the pharmacy services segment of CVS’ business by 8.6% to $39.4 billion.