WOONSOCKET, RHODE ISLAND, February 7, 2024 — CVS Health Corporation (NYSE: CVS) today announced operating results for the three months and year ended December 31, 2023.
CVS Health reports fourth quarter and full-year 2023 results
Key financial data
| Three Months Ended December 31, | |||
|---|---|---|---|
| In millions, except per share amounts | 2023 | 2022 | Change |
| Total revenues | $93,813 | $83,846 | $9,967 |
| Operating income | 3,373 | 3,659 | (286) |
| Adjusted operating income(1) | 4,227 | 4,079 | 148 |
| Diluted earnings per share | $1.58 | $1.77 | ($0.19) |
| Adjusted EPS(2) | $2.12 | $2.04 | $0.08 |
Fourth quarter highlights
- Total revenues increased to $93.8 billion, up 11.9% compared to prior year
- GAAP diluted EPS of $1.58 and Adjusted EPS of $2.12
Full-year highlights
- Total revenues increased to $357.8 billion, up 10.9% compared to prior year
- GAAP diluted EPS of $6.47 and Adjusted EPS of $8.74
- Generated cash flow from operations of $13.4 billion
Note: Financial information as of and for the three months and year ended December 31, 2022 throughout this press release has been revised to conform with certain current period financial statement changes as described in the full press release.
2024 full-year guidance
Upon finalizing the medical cost trend analysis for the fourth quarter of 2023 and recognizing potential implications for elevated medical cost trends in 2024, the Company has:
- Revised GAAP diluted EPS guidance to at least $7.06 from at least $7.26
- Revised Adjusted EPS guidance to at least $8.30 from at least $8.50
- Revised cash flow from operations guidance to at least $12.0 billion from at least $12.5 billion
CEO commentary
“With a focus on delivering care and value, we had a strong fourth quarter and full year in 2023 as we build a world of health around every consumer. We will continue to drive affordable access to care when, where, and how people want, while we improve transparency throughout the health care system.”
— Karen S. Lynch, CVS Health President and CEO
In the spotlight
- Announced CVS CostVantage™, which evolves our pharmacy reimbursement model and brings greater transparency and simplicity to the system. CVS CostVantage will define the drug cost and related reimbursement using a simplified formula built on the cost of the drug, a set markup and a fee that reflects the care and value of pharmacy services. CVS Pharmacy plans to launch CVS CostVantage to commercial payors in 2025.
- Introduced CVS Caremark TrueCost™, a model innovation that offers client pricing reflecting the true net cost of prescription drugs, with visibility into administrative fees. Simplified pricing will allow members to have stable access to the Company’s national pharmacy network. CVS Caremark plans to launch CVS Caremark TrueCost in 2025.
- Launched CVS Healthspire™, the new name for the Health Services segment, which includes Caremark, Cordavis™, Oak Street Health, Signify Health and MinuteClinic®. CVS Healthspire will continue to focus on integration across the Company’s assets to deliver connected patient care, pharmacy benefits and innovative provider support solutions.
- Announced a 10% increase to the quarterly shareholder dividend, which became effective with the February 1, 2024 dividend distribution. Returned $3.1 billion to shareholders through dividends in 2023.
The information presented above includes both GAAP and non-GAAP financial measures to assist in the comparison of the Company’s past financial performance with its current financial performance. See “Non-GAAP Financial Information” in the full press release, which is linked below, for explanations of the non-GAAP financial measures presented above and reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure.
Please review the entire press release for the quarterly period, which provides important additional information related to our financial results. The full press release can be downloaded here (PDF).
(1) The Company defines adjusted operating income as operating income (GAAP measure) excluding the impact of amortization of intangible assets, net realized capital gains or losses and other items, if any, that neither relate to the ordinary course of the Company’s business nor reflect the Company’s underlying business performance, such as acquisition-related transaction and integration costs, restructuring charges, office real estate optimization charges, losses on assets held for sale, opioid litigation charges and gains/losses on divestitures. The Company uses adjusted operating income as its principal measure of segment performance as it enhances the Company’s ability to compare past financial performance with current performance and analyze underlying business performance and trends. The consolidated measure is not determined in accordance with GAAP and should not be considered a substitute for, or superior to, the most directly comparable GAAP measure, consolidated operating income. See “Non-GAAP Financial Information” in the full press release linked above for additional information regarding the items excluded from consolidated operating income in determining consolidated adjusted operating income.
(2) GAAP diluted earnings per share and Adjusted EPS, respectively, are calculated by dividing net income attributable to CVS Health and adjusted income attributable to CVS Health by the Company’s weighted average diluted shares outstanding. The Company defines adjusted income attributable to CVS Health as net income attributable to CVS Health (GAAP measure) excluding the impact of amortization of intangible assets, net realized capital gains or losses and other items, if any, that neither relate to the ordinary course of the Company’s business nor reflect the Company’s underlying business performance, such as acquisition-related transaction and integration costs, restructuring charges, office real estate optimization charges, losses on assets held for sale, opioid litigation charges, gains/losses on divestitures, as well as the corresponding income tax benefit or expense related to the items excluded from adjusted income attributable to CVS Health and certain discrete tax items. See “Non-GAAP Financial Information” in the full press release linked above for additional information regarding the items excluded from net income attributable to CVS Health in determining adjusted income attributable to CVS Health.
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