CVS Health (NYSE:CVS) on Thursday reported first-quarter earnings and revenue that topped estimates and hiked its guidance, as its troubled insurance business showed some improvement during the period.
Shares of CVS were up $4.90, or 7.4%. in mid-morning trading Thursday to $71.61.
The company now expects full-year adjusted earnings of $6 to $6.20 per share, up from a previous guidance of $5.75 to $6 per share.
But the company revised its GAAP diluted EPS guidance to be lower, which includes charges related to a legal battle involving its pharmacy services provider subsidiary, Omnicare.
A jury this week found Omnicare liable for dispensing drugs without valid prescriptions to elderly and disabled individuals in assisted living and long-term care facilities. CVS plans to appeal.
The company did not provide a revenue forecast for the year. CVS said it is “maintaining a cautious view for the remainder of the year” in light of continued higher medical costs and “the potential for macro headwinds.”
“We got smarter about the markets that we wanted and the lives that we wanted to compete for, and so we actually have planned and budgeted for the elevated trends,” CVS CEO David Joyner said. referring to markets that the insurance unit operates in and higher medical costs
“So I think why you’re not seeing a surprise on our part is because we actually plan for elevated trends going into this year,” he added.