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CVS Health on Wednesday recorded a net loss of $3.99 billion during the third quarter, and while the company has raised its profit outlook for the year, stocks still fell more than 3% premarket.
The company's record high $102.9 billion in revenue during the quarter represents 7.8% year-over-year growth, officials said during an earnings call Wednesday morning.
The company incurred a GAAP diluted loss per share of $3.13, inclusive of a $5.7 billion goodwill impairment charge, due to its struggling Health Care Delivery reporting unit, according to Seeking Alpha. This means that its Health Care Delivery unit, which includes HealthHUBs, MinuteClinic, virtual care, home healthcare and Oak Street Health, lost value. Retail clinics at CVS and elsewhere have struggled to gain a foothold as a sustainable business model.
The goodwill impairment charge was partially offset by the absence of about $1.2 billion in restructuring charges from last year, as well as an increase in adjusted operating income.
CVS Health President and CEO David Joyner said during the call that the company is "incredibly proud" of what it has been able to accomplish this year.
"We're still in the early stages of annual enrollment, but we're confident that market position and pricing positions us for another year of recovery," Joyner said.
WHAT'S THE IMPACT
When the company reported first-quarter results in May, it announced that its insurance arm, Aetna, was struggling, and said it would be exiting Affordable Care Act individual markets in 2026.
Aetna has exited the ACA market before, in 2018, when it joined other insurers in leaving or downsizing its footprint, as premiums rose and insurers lost money. In 2021, Aetna reentered the market, with then-CEO Karen Lynch saying that the market had stabilized and resolved earlier "structural issues."
Yet Aetna has struggled since its reintroduction into the ACA exchange, and posted an adjusted operating income loss of $924 million in 2024.
On Wednesday, Joyner called that a "thoughtful and difficult decision" that has helped the company in its financial recovery.
Another difficult decision was slowing the growth of its Oak Street Health primary care clinic business. In September 2024, Oak Street Health said it would pay $60 million to the federal government to resolve allegations that it violated the False Claims Act by paying kickbacks to third-party insurance agents in exchange for recruiting seniors to its clinics.
"Despite this update, value-based care remains a core component of our strategy," Joyner said. "We understand the challenges at Oak Street Health and have taken measures for the short and long term."
CVS touted the performance of Aetna, saying more than 81% of its members are in 2026 Medicare Advantage prescription drug plans rated four stars or higher by the Centers for Medicare and Medicaid Services. Medical membership as of Sept. 30 stood at 26.7 million.
Total revenues for the pharmacy and consumer wellness segment increased to $26 billion, an 11.7% year-over-year jump, due to pharmacy drug mix and increased prescription volume.
"Disciplined execution positions us for another strong year," said Joyner.
THE LARGER TREND
CVS Pharmacy acquired 63 former Rite Aid and Bartell Drugs stores in Idaho, Oregon and Washington earlier this month.
CVS Pharmacy said it has also acquired the prescription files of 626 former Rite Aid and Bartell Drugs pharmacies in 15 states.