CVS bulks up supply service; tops 3Q earnings expectations


Tom Murphy, Ap Health Writer

Updated 7:47 am, Monday, November 6, 2017

  • FILE - This Wednesday, Jan. 18, 2017, file photo shows a CVS Pharmacy in Pittsburgh. CVS Health Corp. reports earnings, Monday, Nov. 6, 2017. Photo: Gene J. Puskar, AP / Copyright 2017 The Associated Press. All rights reserved.



Photo: Gene J. Puskar, AP

FILE – This Wednesday, Jan. 18, 2017, file picture exhibits a CVS Pharmacy in Pittsburgh. CVS Health Corp. studies earnings, Monday, Nov. 6, 2017.

FILE – This Wednesday, Jan. 18, 2017, file picture exhibits a CVS Pharmacy in Pittsburgh. CVS Health Corp. studies earnings, Monday, Nov. 6, 2017.


Photo: Gene J. Puskar, AP

CVS bulks up supply service; tops 3Q earnings expectations


CVS Health is cranking up prescription deliveries to buyer properties or workplaces, as the pharmacy chain tries to squeeze extra of an edge from a large retailer community that places 70 p.c of the U.S. inhabitants inside three miles of one among its areas.

The nation’s second-largest drugstore chain will begin providing free, same-day deliveries in December from its Manhattan websites. It can even develop next-day deliveries nationwide early subsequent 12 months whereas additionally bringing the same-day service to a number of extra cities.

Drugstores and different retailers have been pushing extra customer-friendly providers in recent times partly to counter aggressive strain from Amazon. The on-line retail big already gives to its Amazon Prime members in some cities same-day deliveries of shopper items usually offered in drugstores. That’s a direct menace to the networks of 1000’s of shops constructed by chains like CVS constructed so as to get nearer to the client.

CVS Health Corp. plans to develop same-day deliveries to Miami, Boston, Philadelphia, Washington, D.C., and San Francisco by early subsequent 12 months.

An organization spokeswoman mentioned the supply service could be a sooner various and have a wider attain than its mail-order enterprise.

CVS Health runs greater than 9,700 retail areas, together with pharmacies in Target shops. The firm began a curbside pick-up service a few years in the past, and it already gives deliveries from about 1,600 areas.

The firm says its free, same-day service in Manhattan will probably be performed inside hours. It will rent couriers to ship prescriptions and different merchandise in safe, tamper-proof packaging.

“We’re pushing the envelope on basically serving the patient wherever she is,” Executive Vice President Helena Foulkes advised Wall Street badysts throughout a Monday morning convention name to debate the corporate’s third-quarter efficiency.

CVS Health edged Wall Street earnings expectations within the quarter. But the corporate community exclusions, slumping gross sales from established shops and hurricanes all helped chop its revenue greater than 16 p.c, the corporate mentioned.

Aside from working drugstores, CVS additionally processes greater than a billion prescriptions yearly as a pharmacy advantages supervisor, or PBM.

Its enterprise has taken a success from some key clients which have excluded the corporate from their pharmacy networks. Late final 12 months, CVS was faraway from the community of the federal government’s Tricare program, which supplies protection for navy personnel and their households.

The firm additionally noticed one other PBM, Prime Therapeutics, enter a retail pharmacy community settlement with Walgreens Boots Alliance Inc., which runs the most important drugstore chain.

CVS Health mentioned Monday these exclusions have been a key purpose for its third-quarter revenue drop. The firm additionally took a $55 million hit within the quarter from main hurricanes that hit the United States and Puerto Rico.

Overall, CVS Health earnings fell to $1.29 billion from $1.54 billion in final 12 months’s quarter. Total income climbed greater than three p.c to $46.18 billion.

Earnings, adjusted for one-time positive factors and prices, got here to $1.50 per share.

Analysts anticipated, on common, earnings of $1.49 per share on $46.19 billion in income, in response to Zacks Investment Research.

For 2017, CVS Health Corp. now expects annual adjusted earnings of $5.87 to $5.91 per share, a forecast that counts costs because of the hurricanes. That’s down from a forecast of $5.83 to $5.93 that it made in August.

Analysts anticipate, on common, earnings of $5.88 per share, in response to FactSet.

The Wall Street Journal lately reported that CVS is in talks to purchase the nation’s third-largest insurer, Aetna Inc. The deal may very well be value greater than $60 billion, the newspaper reported, citing nameless sources. CVS Health leaders, like their Aetna counterparts, have declined to debate what they known as market hypothesis.

Shares of Woonsocket, Rhode Island-based CVS Health slipped 97 cents to $68.28 as broader indexes rose barely in morning buying and selling.

The inventory had declined 12 p.c because the starting of the 12 months, whereas the Standard & Poor’s 500 index has elevated 16 p.c.

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Elements of this story have been generated by Automated Insights (https://automatedinsights.com/ap) utilizing knowledge from Zacks Investment Research. Access a Zacks inventory report on CVS at https://www.zacks.com/ap/CVS


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