CVS Health(US:CVS) ZACKSยท2025-05-01 14:15Core Insights - CVS Health Corporation reported adjusted earnings per share (EPS) of $2.25 for Q1 2025, reflecting a year-over-year increase of 71.8% and exceeding the Zacks Consensus Estimate by 34.7% [1] - The company's revenues for the first quarter rose 7% year over year to $94.59 billion, surpassing the Zacks Consensus Estimate by 1.8% [2] Revenue Breakdown - Health Services revenues increased by 7.9% year over year to $43.46 billion, driven by pharmacy drug mix, growth in specialty pharmacy, and brand inflation [3] - Pharmacy & Consumer Wellness segment revenues rose 11.1% year over year to $31.91 billion, primarily due to pharmacy drug mix and increased prescription volume [4] - Health Care Benefits segment revenues reached $34.81 billion, up 8% year over year, supported by growth in the Medicare product line and improved Medicare Advantage star ratings [5] Margin Performance - Total cost of sold products increased by 6.2% to $51.06 billion, while gross profit rose by 7.9% to $43.53 billion, leading to a gross margin expansion of 38 basis points to 46% [6] - The adjusted operating margin expanded by 36 basis points to 34.4%, despite a 7.1% rise in operating expenses to $11.02 billion [6] Liquidity Position - CVS Health ended Q1 2025 with cash and cash equivalents of $10.08 billion, up from $8.59 billion at the end of Q4 2024, while long-term debt decreased to $59.04 billion from $60.53 billion [7] - Cumulative net cash provided by operating activities was $4.56 billion, down from $4.90 billion in the prior year [7] Guidance - CVS Health updated its guidance for 2025, projecting adjusted EPS in the range of $6.00 to $6.20, an increase from the previous range of $5.75 to $6.00 [8] Overall Performance - The company exited Q1 2025 with strong earnings and revenues that beat estimates, benefiting from improved operating results in the Health Care Benefits segment and margin expansions [10]