CVS Health posts $2B profit in Q4

CVS Health recorded $2 billion in profit in the fourth quarter of 2023, a 12% decline year over year driven by increased pressure in its Medicare Advantage business. 

In the fourth quarter and full year earnings report issued Feb. 7, CVS reported $8.4 billion in net income for 2023, up 93% over 2022. 

Total revenue in the fourth quarter was $93.8 billion, up around 12% from the same time period last year. For 2023, total revenue was $357.8 billion, up around 11% year over year. 

The company reported adjusted earnings per share of $8.74 for 2023. The company cut its earnings guidance for 2024 based on rising costs in the Medicare Advantage business to $8.30 per share. 

Healthcare benefits 

  • In its insurance segment, CVS Health posted year-end revenue of $105.6 billion, up 16% year over year. 
  • Adjusted operating income in the segment declined 26% in the fourth quarter year over year, due to increased enrollment in individual business and increasing Medicare Advantage costs. 
  • CVS reported a medical benefit ratio of 88.5% in the fourth quarter, up from 85.8% last year, driven by increased outpatient and supplemental benefit use in Medicare Advantage, according to the report.

Healthcare services 

  • Revenues from CVS' pharmacy benefit and healthcare provider business increased 10.3% in 2023, for full-year revenue of $186.8 billion in 2023. The acquisitions of Signify and Oak Street Health and growth in specialty pharmacy drove the increase, the company said. 
  • Total adjusted income in the segment increased 7.8% year over year to $7.3 billion in 2023. 

Pharmacy and consumer wellness 

  • CVS' retail segment reported a 7.5% increase in revenue in 2023, to $116.8 billion. 
  • The company reported an 8.7% decrease in income in the segment in 2023, declining to $6 billion. The drop was driven by increasing pharmacy reimbursement pressure and declines in COVID-19 vaccines and testing administered at CVS' pharmacies. 

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