Health

CVS Health Slashes 2024 Outlook Again Amid Rising Medical Costs and Executive Departure

Aug 7, 2024 1 min read

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CVS Health has revised its full-year profit outlook downward, citing higher medical costs impacting the U.S. insurance industry. The company now expects 2024 adjusted earnings to range between $6.40 and $6.65 per share, a reduction from its previous forecast of at least $7 per share. This marks the third consecutive quarter that CVS has lowered its profit guidance. The company attributes this adjustment to continued pressures on its health insurance segment, including increased medical costs and the negative impact of its Medicare Advantage star ratings.

In response to these challenges, CVS Health has announced a plan to cut $2 billion in costs over several years. The company also reported the departure of Aetna President Brian Kane, with CEO Karen Lynch taking over his responsibilities. Despite these setbacks, CVS's total sales for the quarter rose by 2.6% to $91.23 billion, driven by growth in its pharmacy business and insurance unit. However, sales in its health services segment fell by 8.8%, partly due to the loss of a contract with Centene Corp. and more competitive pricing for pharmacy customers.

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