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The strength of earnings from a major acquisition allowed CVS Health's earnings to grow 42% in the first quarter. The company raised its forecast for 2019 after starting the year with a more pessimistic outlook.
CVS now expects adjusted earnings this year to be between $ 6.75 and $ 6.90 per share. This is up from the company's initial guidance in February for earnings per share of $ 6.68 to $ 6.88, a prospect well below Wall Street's expectations.
Analysts now expect earnings of $ 6.79 per share, according to FactSet.
CVS, the second largest pharmacy chain in the country, manages more than 9,900 stores and processes more than one billion prescriptions each year as the pharmacy benefits manager. The so-called PBMs cover prescription drugs for insurers, employers and other large clients.
At the end of last year, health insurance has surged after the acquisition of the insurer Aetna for about $ 69 billion.
A federal judge is still considering the acquisition, but CVS Health released combined results for the first time on Wednesday. Aetna helped offset the difficulties faced by prescription processors such as CVS Health.
Insurers impose cost reductions that reduce benefits on each prescription. Generic drugs are less profitable and stores are facing increasing competition in areas outside their pharmacies.
The Aetna agreement gives CVS health a new business sector with 23 million customers. Woonsocket, Rhode Island, said the figure was up 35 percent to $ 61.65 billion. Net income increased from $ 998 million to $ 1.42 billion, while adjusted earnings reached $ 1.62 per share.
It was 12 cents better than expected, according to a survey by Zacks Investment Research. Revenues also exceeded expectations.
The shares of CVS Health Corp. surged more than 4% to $ 56.85 before the opening bell.
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Portions of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a report on Zacks shares on CVS at https://www.zacks.com/ap/CVS.
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