We review CVS Health’s performance in the second quarter and its latest developments to help navigate through COVID-19.
Revenue growth despite being impacted by COVID-19
CVS Health reported total revenue increased by 3.0% to $USD 65.3bn for the second quarter ending 30th June 2020. The drugstore chain reported growth despite being affected by COVID-19, with impacts on its footfall and number of prescriptions filled due to stay-at-home orders. Adjusted operating income increased by 32.2% to $USD 5.3bn and growth was attributed to the reduced benefit costs due to deferral of elective procedures.
Pharmacy services segment:
- Total revenue increased by 0.13% to $USD 34.9bn
- Adjusted operating income increased by 2.4% to $USD 1.33bn.
The retail/ Long-Term Care segment
- Total revenue increase of 1.0% to $USD 21.7bn
- Adjusted operating income decreased by 36.7% to $USD 1.1bn. This was due to the impact of COVID-19 which resulted in incremental operating costs linked to the business’s response to the pandemic, decreased front store sales and reduced new therapy prescription.
Larry Merlo, CVS Health’s president and CEO highlighted,
“We’re a health innovation company that is built to meet the evolving needs of the millions we serve every day. That’s been made clear as we continue to navigate the health, social and economic impacts of COVID-19. Our earnings in this environment demonstrate the strength of our strategy and the power of our diversified business model.”
The drugstore chain projects higher use in its Health Care Benefits segment in the second half of 2020 compared to the first half and will continue to make significant COVID-19 related investments.
Launched ‘Return Ready’ for safe return to work
CVS announced its new initiative, ‘Return Ready’, a comprehensive and integrated end-to-end COVID-19 testing solution to help employers and universities to ensure safety for their returning employees and students through a combination of rapid worksite testing and/or drive-thru testing. Currently, CVS has 1,800 drive-thru testing locations wit more than 50% located in areas where significant support is needed.
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