CVS Health attributes $3.4B Q3 loss to opioid lawsuit settlement

CVS Health raised its annual earnings outlook after beating investor expectations in the third quarter, but the company reported $3.4 billion in losses after agreeing to pay into a global opioid lawsuit settlement starting next year.

The $5 billion settlement will be paid out over 10 years and "substantially resolve all opioid lawsuits and claims against the company by states, political subdivisions, such as counties and cities, and tribes in the United States," the company said in its Nov. 2 earnings report.

The company's third quarter EPS is $2.09 and $6.71 for 2022. It also raised its full year guidance and expects adjusted EPS to rise from a range of $8.40-$8.60 to $8.55-$8.65.

"We delivered another outstanding quarter, and have raised full-year guidance as a result. We continue to execute on our strategy with a focus on expanding capabilities in health care delivery, and the announced acquisition of Signify Health will further strengthen our engagement with consumers," President and CEO Karen Lynch said.

Total revenues in the third quarter were $81.2 billion, an increase of nearly 10 percent from $73.8 billion during the same period in 2021. Total revenues in 2022 are $238.6 billion.

Total operating expenses for the quarter were $85.1 billion, which have increased 20.3 percent since the same period last year.

The healthcare benefits segment reported total revenues of $22.5 billion, an increase of nearly 10 percent since 2021. Total revenues in 2022 are $68.4 billion. Operating expenses grew 6.7 percent to $3.7 billion in the third quarter.

Total medical membership is 24.3 million people. About 17 million have commercial plans, 3.3 million with Medicare Advantage, 1.3 million with supplemental plans and 2.7 million are covered under Medicaid. Days claims payable was 54.9, increasing from 51.1 days at the same time last year.

The pharmacy services segment saw total revenues of $43.2 billion, increasing 10.7 percent from $39 billion last year. Total 2022 revenues are $125.5 billion. Operating expenses in the third quarter were $382 million, a decrease from $391 million in 2021. In total, nearly 585 million pharmacy claims were processed in the third quarter.

The retail segment reported revenues of $26.7 billion, increasing 6.9 percent from nearly $25 billion year over year. Total 2022 revenues are $78.5 billion. Gross profits were $6.4 billion in the third quarter, a decrease of 2.7 percent from $6.6 billion year over year.



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