CVS Health, Aetna, Cardinal Health Quarterly Profits Beat Estimates

(RTTNews) - Healthcare companies CVS Health Corp. (CVS), Aetna Inc. (AET) and Cardinal Health Inc. (CAH) all reported quarterly profits that beat analysts' estimates, while their revenues also increased from last year.

Drugstore chain CVS Health reported a decline in second-quarter profit despite higher revenues. However, adjusted earnings per share beat analysts' expectations, while revenues missed their estimates.

The company's second-quarter attributable net earnings was $924 million or $0.86 per share, lower than $1.27 billion or $1.12 per share in the prior-year quarter.

The decline in profit primary reflects loss on early extinguishment of debt, higher interest expense and acquisition-related integration costs.

However, adjusted net earnings were $1.32 per share, compared to $1.22 per share in the year-ago quarter. On average, 23 analysts polled by Thomson Reuters expected the company to report earnings of $1.30 per share. Analysts' estimates typically exclude special items.

Net revenues increased 17.6 percent to $43.73 billion from $37.17 billion in the same quarter last year, but missed analysts' consensus of $44.28 billion.

Looking ahead to the third quarter, CVS Health forecast adjusted earnings of $1.55 to $1.58 per share. Analysts expect earnings of $1.55 per share.

For fiscal 2016, CVS Health raised its forecast for adjusted earnings to a range of $5.81 to $5.89 per share from the prior range of $5.73 to $5.88 per share. The Street expects earnings of $5.82 per share for the year.

However, CVS Health lowered its full-year reported earnings outlook to a range of $4.92 to $5.00 per share from the prior range of $5.24 to $5.39 per share, to reflect the impact of the loss on early extinguishment of debt and second quarter acquisition-related integration costs.

Health insurer Aetna, which is in a deal to acquire peer Humana Inc. (HUM), reported an 8 percent increase in second-quarter profit. Adjusted earnings beat analysts' estimates.

The company's second-quarter net income increased to $790.8 million or $2.23 per share from $731.8 million or $2.08 per share in the previous-year quarter.

The increase in profit reflects the reduction of Aetna's reserve for anticipated future losses on discontinued products, higher operating earnings and an increase in net realized capital gains.

Operating earnings were $2.21 per share, compared to $2.05 per share last year. Analysts expected earnings of $2.12 per share.

Total revenue increased 5 percent to $15.95 billion from $15.24 billion a year ago. Analysts expected revenues of $15.69 billion.

The increase in total revenue was primarily due to higher Health Care premium yields and membership growth in Aetna's Government business. These were partially offset by membership declines in Aetna's Commercial Insured products.

For fiscal 2016, Aetna reaffirmed its outlook for operating earnings of $7.90 to $8.10 per share. The Street expects earnings of $8.05 per share for the year.

However, Aetna said that due to updated 2016 projections for its individual products and the significant structural challenges facing the public exchanges, it plans to withdraw all of its 2017 expansion plans for the Affordable Care Act business. The company is undertaking a complete evaluation of future participation in its current 15-state footprint.

Meanwhile, Cardinal Health reported a 13 percent increase in profit for the fourth quarter from last year on strong revenue growth. Both revenue and adjusted earnings beat analysts' expectations.

Fourth-quarter net earnings attributable to the company rose to $333 million or $1.02 per share from $295 million or $0.88 per share in the prior-year quarter.

Adjusted earnings from continuing operations were $1.14 per share, compared to $1.00 per share last year. Analysts expected earnings of $1.13 per share.

Revenue grew 14 percent to $31.38 billion from $27.55 billion in the prior year. Wall Street expected revenues of $31.19 billion.

Looking ahead to the first quarter, Cardinal health projects a year-over-year decline in adjusted earnings per share in the high-single- to low-double-digit-percent range.

This expectation is largely due to an anticipated first-quarter decline in Pharmaceutical segment profit in a percentage range from the high teens to low twenties, with full-year Pharmaceutical segment profit expected to be essentially flat to fiscal year 2016.

For fiscal 2017, Cardinal Health forecast adjusted earnings per share from continuing operations of $5.48 to $5.73 per share, representing growth of approximately 5 to 9 percent from the prior year. The Street expects earnings of $5.70 per share.