CVS Health(US:CVS) ZACKS·2026-02-10 17:45Core Insights - CVS Health Corporation reported fourth-quarter 2025 adjusted earnings per share (EPS) of $1.09, an 8.4% decline year over year, but exceeded the Zacks Consensus Estimate by 10.1% [1][9] - The company's total revenues for the fourth quarter rose 8.2% year over year to $105.69 billion, surpassing the Zacks Consensus Estimate by 2.2% [3][9] - CVS Health's full-year adjusted EPS was $6.75, a 24.5% increase from 2024, beating the Zacks Consensus Estimate by 1.5% [2] Revenue Performance - Health Services revenues increased 9% year over year to $51.24 billion, driven by pharmacy drug mix and brand inflation, despite a 7.5% decline in total pharmacy claims processed [4] - Revenues in the Pharmacy & Consumer Wellness segment rose 12.4% year over year to $37.66 billion, primarily due to increased prescription volume and acquisitions, offset by reimbursement pressure [5] - The Health Care Benefits segment reported revenues of $36.29 billion, up 10.1% year over year, largely due to the Government business and the Inflation Reduction Act's impact on Medicare Part D [6] Margin Analysis - The combined cost of products sold and healthcare costs rose 8.6% to $92.13 billion, while gross profit increased 5.2% to $13.57 billion, leading to a gross margin contraction of 37 basis points to 12.8% [7] - Adjusted operating margin contracted 44 basis points to 1.9%, despite an 8.9% rise in total operating expenses to $11.46 billion [7] Liquidity Position - CVS Health ended 2025 with cash and cash equivalents of $8.45 billion, a slight decrease from $8.59 billion at the end of 2024, while long-term debt increased to $64.57 billion from $64.15 billion [8] Future Guidance - CVS Health provided 2026 adjusted EPS guidance in the range of $7.00-$7.20, with the Zacks Consensus Estimate currently at $7.15 [11] Overall Assessment - CVS Health's fourth-quarter earnings and revenues exceeded estimates, with year-over-year revenue growth across all segments. However, higher costs and expenses led to margin contraction and bottom-line pressure [12]