© Reuters. FILE PHOTO: People walk by a CVS Pharmacy store in the Manhattan borough of New York City, New York, U.S., November 30, 2017. REUTERS/Shannon Stapleton
(Reuters) -CVS Health Corp raised its annual earnings forecast, after it reported a quarterly profit on Wednesday that beat analysts’ estimates, helped by higher prescription drug sales, COVID-19 testing and vaccinations at its pharmacies and clinics.
With nearly half of all Americans fully vaccinated, demand for prescription drugs and over-the-counter products at the company’s pharmacies recovered from the declines seen in previous quarters during the height of the pandemic.
CVS Health (NYSE:) raised its 2021 adjusted profit per share outlook to between $7.70 and $7.80, from $7.56 to $7.68, after it reported an 11.1% increase in quarterly revenue to $72.6 billion.
The company, however, warned of COVID-19 vaccinations to slow in the second half of the year, and medical costs to increase modestly at its health insurance unit Aetna (NYSE:).
Health insurers saw lower medical costs during the initial phase of the pandemic, as people deferred elective medical procedures, however, widespread vaccinations have led to demand for non-COVID healthcare services normalizing.
CVS said its medical benefit ratio (MBR), or the percentage of premiums paid for medical services, for the second quarter rose to 84.1% from 70.3%. A lower MBR is better for health insurers as it signals a tight rein on medical costs.
On an adjusted basis, CVS earned $2.42 per share, beating estimates of $2.06 per share, according to Refinitiv IBES data.
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