CVS Paints Grim Picture For 2019 As It Struggles With An Old Acquisition, Rising Health Costs And Attacks From Washington
CVS reported a net loss of $421 million in the fourth quarter and $596 million for the full year 2018, and the earnings expectations for 2019 are well below Wall Street forecasts. The companies financial health, or lack thereof, is raising questions about whether pursuing its $70 billion take-over of Aetna was the right call.
The Associated Press:
Trouble At CVS Health Long-Term Care Business Weighs Heavily
CVS Health is setting 2019 earnings expectations well below Wall Street forecasts, as the company struggles to fix part of its business while blending in a major acquisition and attempting to change how customers use its stores. The drugstore chain and pharmacy benefit manager also is dealing with industry-wide pressure to reduce what customers pay for prescriptions. (Murphy, 2/20)
The Wall Street Journal:
CVS Gives Downbeat Earnings Outlook For First Year As Merged Company
The Woonsocket, R.I.-based company, which in November completed its nearly $70 billion acquisition of insurer Aetna Inc., said that it was taking rapid steps to address the problems, including a cost-cutting effort, and that its ambitious deal positioned it for long-term growth. CVS, which has said that its deal to bring together drugstores, pharmacy-benefit management and insurance would help it cut health-care costs and improve care, said it was building new offerings. (Wilde Mathews and Al-Muslim, 2/20)
Bloomberg:
CVS Sees Dire 2019 As Deal From 2015 Turns Out To Be A Lemon
Facing challenges to its business from all around, CVS on Wednesday dangled the possibility of cutting expenses to get profits back in line. “We see additional opportunities to continue to manage our cost base and reduce our core to help mitigate those headwinds,” Chief Financial Officer Eva Boratto said on a call with analysts. In a phone interview, Chief Executive Officer Larry Merlo said the main focus of new merged company is growth, not cost-cutting. He described the issues holding down profits at retail drugstores this year -- including a paucity of new generic drug introductions -- as transitory. And he said that CVS is committed to the nursing-home pharmacy arena despite the disappointing results so far. (Langreth, 2/20)
Modern Healthcare:
CVS' Bottom Line Sags After Aetna Takeover
Still, CVS CEO Larry Merlo hailed 2018 "a milestone year for CVS Health as we successfully completed our transformational merger with Aetna, began effective implementation of our integration strategy, and took important steps toward building the integrated healthcare model that will bring substantial value to our various stakeholders." (Livingston, 2/20)
