CVS Health reported strong first-quarter results that exceeded Wall Street’s expectations. The company’s revenue reached $94.59 billion, up 7% from the same period last year, while adjusted earnings per share were $2.25, beating the expected $1.70. The healthcare giant’s performance was driven by improvements across all business segments, particularly in its insurance business.
CVS’ medical benefit ratio decreased to 87.3% from 90.4% a year earlier, indicating higher profitability in its Aetna insurance unit. This improvement reflects stronger performance in its Medicare business and better Medicare Advantage star ratings for 2025. CEO David Joyner attributed the insurance unit’s improved performance to an executive reshuffling last year, including appointing a new division leader.
We got smarter about the markets we wanted and the lives we wanted to compete for,” Joyner said in an interview.
Cautious optimism amid strong earnings
Despite the positive results, CVS remains cautious due to continued high medical costs and potential macroeconomic headwinds.
The company also revised its GAAP diluted EPS guidance downward due to charges related to a legal battle involving its pharmacy services provider subsidiary, Omnicare. CVS now projects full-year adjusted earnings of $6 to $6.20 per share, up from the previous guidance of $5.75 to $6 per share. The company posted net income of $1.78 billion, or $1.41 per share, compared with $1.12 billion, or 88 cents per share, a year earlier.
The company’s pharmacy and consumer wellness segment saw sales of $31.91 billion for the first quarter, up more than 11% year-over-year. The health services segment reported revenue of $43.46 billion, up nearly 8% compared to the first quarter of 2024. CVS also announced that its Aetna insurance unit will stop offering health insurance plans on the Affordable Care Act marketplaces starting in the 2026 plan year. Shares of CVS closed 4% higher on Thursday following the news, as investors reacted positively to the company’s strong performance and improved guidance.
CVS Health’s first-quarter results demonstrate significant progress in addressing previous challenges and positioning the company for future growth.