FILE PHOTO: A CVS Health logo is displayed on a monitor above the floor of the New York Stock Exchange shortly after the opening bell in New York, United States, on December 5, 2017. REUTERS / Lucas Jackson / File Photo
(Reuters) – CVS Health Corp is forecasting annual profits well below Wall Street estimates on Wednesday because of its weak long-term health care sector, dropping its shares by 5%.
The pharmacist and benefits manager of the pharmacy, who had purchased Aetna's health insurance last year, forecast adjusted earnings for the year 2019 of $ 6.68 per share at $ 6.88 per share, while analysts expect on average a profit of 7.41 USD per share, according to Refinitiv's IBES data.
The Company's long-term healthcare business has been impacted by lower occupancy rates and repayment constraints in recent quarters.
"We are fully aware of the need to deal with some headwinds that have a disproportionate impact in 2019 compared to previous years and, importantly, we are taking comprehensive steps to overcome them," said the CEO, Larry Menlo.
For the fourth quarter, CVS Health posted net earnings of $ 2.14 per share, compared to an average of $ 2.05.
The Company recorded a net loss of $ 419 million, or 37 cents per share, in the fourth quarter ended December 31, compared to net income of $ 3.29 billion, or $ 3.22 per share, a a year earlier, while she benefited from changes in US tax. laws.
A $ 2.2 billion impairment loss related to Omnicare's retail unit business was retained in the fourth quarter, after a charge of $ 3.9 billion in the second quarter of 2018.
Revenues reached $ 54.42 billion in the quarter, compared to $ 48.39 billion a year earlier.
Report by Aakash Jagadeesh Babu and Manas Mishra in Bengaluru; Edited by Saumyadeb Chakrabarty