CVS Health (CVS) has announced an adjusted earnings guidance for 2019 significantly lower than Wall Street expectations, following the takeover by Aetna Insurance Company ($ 68 billion) of the pharmacy management company and pharmacies at the end of last year. The stock of CVS fell early Wednesday.
Adjusted earnings for 2019 will be $ 6.68 to $ 6.88 per share, announced the medical services giant. Wall Street is expecting a CVS profit of $ 7.36.
CVS Health is trying to set low expectations after the Aetna agreement closes in November. CEO Larry Merlo has termed 2019 "a year of transition" in a statement and said that CVS should "tackle the impact of some headwinds that have a disproportionate impact in 2019 compared in previous years ".
Another contract lingers at the heart of CVS: its takeover in 2015 of the drug provider for OmniCare home care facilities. Nursing homes have fewer clients and are less profitable. CVS levies $ 2.2 billion on the transaction after these trends "have affected our ability to develop activity at the initially estimated rate". This charge follows a depreciation of $ 3.9 billion in the second quarter.
CVS is also struggling with costs. Although the federal tax rate reduced the tax rate, the company had to reinstate some of these savings in workers' wages and benefits.
The CVS stock fell 8.6% shortly after the opening of the stock market. Walgreens Boots Alliance (WBA) slipped 2%.
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