CVS Health Cuts 2024 Earnings Outlook Amid Costs

CVS Health has cut its full-year 2024 earnings guidance for the third consecutive quarter, now projecting adjusted EPS between $6.40 and $6.65, down from at least $7.00. The healthcare giant reported second-quarter earnings that exceeded analysts' expectations with an adjusted EPS of $1.83, but revenue of $91.2 billion fell short of estimates. The decline in guidance is attributed to ongoing pressures in the Health Care Benefits segment, exacerbated by rising medical costs and unfavorable Medicare Advantage star ratings. In response, CVS plans a $2 billion cost-cutting initiative, which includes leadership changes, with CEO Karen Lynch taking direct control of the Aetna insurance unit following the departure of its president, Brian Kane. Despite strong performance in Health Services and Pharmacy segments, CVS shares fell 2.7% following the announcement, reflecting investor concerns over its financial outlook amidst escalating costs in the healthcare industry.