CVS Health (CVS) earnings Q1 2025

CVS Health on Thursday reported first-quarter earnings and revenue that topped estimates and hiked its guidance, as its troubled insurance business showed some improvement during the period. 

Shares of CVS closed 4% higher Thursday.

The company now expects full-year adjusted earnings of $6 to $6.20 per share, up from a previous guidance of $5.75 to $6 per share.

But the company revised its GAAP diluted EPS guidance to be lower, which includes charges related to a legal battle involving its pharmacy services provider subsidiary, Omnicare. A jury this week found Omnicare liable for dispensing drugs without valid prescriptions to elderly and disabled individuals in assisted living and long-term care facilities. CVS plans to appeal.

The company did not provide a revenue forecast for the year. CVS said it is “maintaining a cautious view for the remainder of the year” in light of continued higher medical costs and “the potential for macro headwinds.”

“We got smarter about the markets that we wanted and the lives that we wanted to compete for, and so we actually have planned and budgeted for the elevated trends,” CVS CEO David Joyner said in an interview with CNBC, referring to markets that the insurance unit operates in and higher medical costs

“So I think why you’re not seeing a surprise on our part is because we actually plan for elevated trends going into this year,” he added.

Joyner said the company is watching for the potential impact from President Donald Trump’s planned tariffs on pharmaceuticals imported into the U.S.

“On the pharmacy side, I think it is highly dependent on what happens in the next week or two when they announce the implications of tariffs on the manufacturers,” he told CNBC. Joyner added that the vast majority of the company’s retail products at the front of stores are sourced in the U.S., “which should be a benefit for us.”

Here’s what CVS reported for the first quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG: 

• Earnings per share: $2.25 per share adjusted vs. $1.70 per share expected
• Revenue: $94.59 billion vs. $93.64 billion expected

The company’s insurer, Aetna, and its rivals have been dogged by higher-than-expected medical costs over the last year as more Medicare Advantage patients return to hospitals for procedures they delayed during the pandemic. But for the first time in several quarters, CVS’ insurance business appeared to show some signs of improvement.

The unit’s medical benefit ratio — a measure of total medical expenses paid relative to premiums collected — decreased to 87.3% from 90.4% a year earlier. A lower ratio typically indicates that a company collected more in premiums than it paid out in benefits, resulting in higher profitability.

CVS said the move partly reflects stronger underlying performance in its Medicare business and improved Medicare…