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CVS Health Corp. on Wednesday posted higher-than-expected profits for the first quarter, thanks mainly to its recent $69 billion acquisition of Hartford health insurer Aetna.
For the quarter ended March 31, the Rhode Island-based retail pharmacy and benefits manager reported net income of $1.42 billion, or $1.09 per diluted share, up 43 percent from the $998 million, or 98 cents, in the same period last year.
CVS said its revenues increased 34.8 percent, from $45.7 billion to $61.6 billion, with Aetna responsible for much of it.
The rise in shares and revenues both beat Wall Street analysts’ estimates.
Revenue from the company’s pharmacy benefit unit increased by 3.1 percent to $33.5 billion, while retail sales rose 3.3 percent to $21.1 billion.
Driven by major membership growth due to its addition of Aetna, CVS said its healthcare benefits segment increased revenues by $16.6 billion during the three-month period, to $17.8 billion.
CVS CEO Larry Merlo said the first-quarter results offer a strong start for the companies in 2019. Merlo called CVS’ first full quarter operating with Aetna a “success.”
After the Tuesday morning earnings release, premarket trading for CVS shares were up 5.3 percent to $57.27 as of 10:45 a.m.
CVS raised its adjusted profit per share outlook to $6.75 to $6.90 for 2018, up from its previous forecasted range of $6.68 to $6.88.
While CVS is reporting earnings that include Aetna, the company is still working to clear a regulatory hurdle for the acquisition.
A federal judge has not yet signed off on the combination as he continues to review the antitrust settlement the U.S. Department of Justice struck with the companies in October.
The judge has asked those opposing the $69 billion deal to present their arguments at a potentially week-long hearing in Washington D.C. sometime this month.
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