CVS Health(US:CVS) ZACKS·2025-10-29 14:01Core Insights - CVS Health Corporation reported third-quarter 2025 adjusted earnings per share (EPS) of $1.60, reflecting a year-over-year increase of 46.8% and exceeding the Zacks Consensus Estimate by 17.65% [1][8] - The company's total revenues rose 7.8% year over year to $102.87 billion, surpassing the Zacks Consensus Estimate by 4.66% [2][8] - CVS raised its 2025 adjusted EPS guidance to a range of $6.55-$6.65 from the previous $6.30-$6.40 [9][10] Revenue Breakdown - Health Services revenues increased by 11.6% year over year to $49.27 billion, driven by pharmacy drug mix and brand inflation, despite a 1.8% decline in total pharmacy claims processed [3] - Revenues in the Pharmacy & Consumer Wellness segment rose 11.7% year over year to $36.21 billion, primarily due to an increase in prescription volume [4] - The Health Care Benefits segment reported revenues of $36 billion, up 9.1% year over year, largely influenced by the Government business and the Inflation Reduction Act's impact on Medicare Part D [4] Margin Performance - The total cost of sold products increased by 7.7% to $57.05 billion, while gross profit rose by 7.9% to $45.83 billion, resulting in a gross margin expansion of 3 basis points to 44.6% [5] - The adjusted operating margin improved by 12 basis points to 33.6%, despite a 6.9% rise in total operating expenses, which amounted to $11.29 billion [5] Liquidity Position - At the end of the third quarter of 2025, CVS had cash and cash equivalents of $9.10 billion, down from $11.79 billion at the end of the second quarter [6] - Long-term debt increased to $60.51 billion from $57.29 billion in the previous quarter, while cumulative net cash provided by operating activities remained stable at $7.25 billion [6] Market Reaction and Future Outlook - Following the earnings announcement, CVS shares experienced a decline of 2.1% in pre-market trading [2] - The company’s strong performance in earnings and revenues, along with the raised full-year outlook, indicates a positive trajectory despite ongoing pharmacy reimbursement pressures [10][11]